Remember: In 1930, They Didn't Know It Was "the Great Depression" Yet

[Joanne98]

In the past year, we've written a lot about the similarity between the rally of early 1930 and the one we had through April of this year.

The early 1930 rally came after the market had fallen nearly 50% in the fall of 1929. The spring 1930 rally took the market up nearly 50% again, to a level that was only about 20% below the previous peak.

That rally, of course, was also the biggest sucker's rally in history. After the market peaked in April 1930, it crashed again, eventually ending up down 89% from the 1929 high and more than 80% from the 1930 high. The market did not reach the 1930 high again for another quarter of a century.

The rally that recently ended in April 2010 came after a crash that was actually slightly more severe than the 1929 crash (53% versus 48%). It took the market up nearly 80% from the low! The recent rally also lasted longer than the 1930 rally did--a year, as opposed to 6 months.

The 2009-2010 rally that ended in April, of course, may actually be the start of a great new bull market, one that will shake off the current "correction" and roar back to the market's old highs. On the other hand, it may yet also be another version of what happened in 1930 -- the start of another bear market that will take the market down for years (or even, gulp, to a new low).

http://www.huffingtonpost.com/henry-blodget/remember-in-1930-they-did_b_605814.html

[customerserviceguy]

1. Which is why

I'm a million miles away from the stock market casino. It's always about sharpies trying to make money off of suckers.

[monmouth]

2. Yes indeed. Wall Street, Vegas or Atlantic City, same game different names...n/t

[customerserviceguy]

4. Hey, at least you get drinks

in Vegas and AC!

[BR_Parkway]

17. There seem to be more rules enforced at Vegas and Atlantic City

the customer does have a better expectation of the outcome of the games when they sit down to play. And even when they lose, they got the entertainment aspect as well as drinks!

[Warpy]

3. I'm betting it will be the latter

and that we'll go below what the market should be, indexed to inflation, which I guesstimate at the 6500-7500 range. I've steeled myself to endure it, anyway, because I can think of few alternate places to stash the boodle, and besides, I was always taught to invest for income, not net worth or paper profits.

Until and unless this country realizes that any economic recovery has to start from the bottom up and the way to effect it is to tax the hell out of the very top while cutting the Pentagon budget down to size, I'm afraid there's little hope for a massive rally in the Dow that will be long lasting.

[reggie the dog]

9. I have money stashed in 2 currencies

euros and us dollars, i have nearly 100 grams of hash and 5 nice female plants in the hills capable of giving me a half pound each with watering. aside from smoking for free i will be able to trade for food if the shit hits the fan....i have 2 bicycles, we have tomatoes and lettuce and raddishes etc....

[HockeyMom]

5. Money under the mattress

I am 61 years old and remember what my Grandma (born 1900) told me. My Grandpa invested in the market. Grandma didn't trust the market, or banks. She horded away gold coins and diamond jewelry under their mattress and around the apartment. When the market crashed, they survived because of her "hoard". She told me this since I was a very young child over and over. I guess her words have "haunted" me all these decades. It is why I never joined any 401Ks or anything like it. I DO have a LOT of real gold and diamonds in a vault.

[nichomachus]

8. The only problem with your grandma's scheme

was that the private possession of gold was criminalized by the US government in 1934.

[reggie the dog]

12. ??? i have gold coins and jewelry

am i as much of a crook for that as i am for the weed i have stashed???

[nichomachus]

15. Jewelry was excluded

But, starting in 1934, bank safety deposit boxes could not be opened except in the presence of an IRS agent.

I don't know what the regulations are today.

[reggie the dog]

10. things worth stashing

gold and jewels have worked historically

drugs, when the shit hits the fan people will want to get high

cocaine is the easiest way to hide money value in the smallest space but it is also more illegal than cannabis

cannabis is a good way but goes stale faster than cocaine but it is not as illegal

heroin is also a good way to store a lot of value in a small space but aside from higher illegality it is more soul robbing so i would never invest in it.

stock away jewels, guns, and drugs

[nichomachus]

16. Jewels are not a good thing to save

They are a really bad "investment," no matter what people tell you. You can buy them only at high markup retail and you can sell them only at low markdown wholesale -- and for whatever the buyer is willing to give you. You will always lose money.

[Warpy]

13. That's also the first place a burglar will look

so unless you're housebound, find a better place, preferably one that requires a ladder and/or flashlight. Adding tools like screwdrivers or pry bars makes it even better since 99% of thieves want to be in and out within 10 minutes and are not going to dismantle your house to find your stash.

Forget the mattress, the sock drawer or the toilet tank. I know this because they've all been disturbed in the burglaries I've endured.

[reggie the dog]

18. the sock drawer

gets my monthly smoking stash, the rest is hidden from both theives and coppers....

[Warpy]

19. Word of advice, think up

They don't seem to want to investigate much at eye level or above.

[Tutankhamun]

6. The smart money is short right now.

One problem is that a lot of people don't understand how to short. They don't even know what that means. If you have, for example, $10,000 long and $10,000 short (in different stocks of course), and the market crashes, you should be fne. You very well might make money.

Having both short and long positons is an absolute necessity if you own stocks. I know this isn't an investment forum, but just a little advice for my DU brothers and sisters: If you're in the market, make sure you have a good percentage of your portfolio (I recommend 50 percent) in short positions. You need to be protected in the (very likely) event of an impending market crash.

I've traded for a living, and I'm not blowing hot air. This is as serious as cancer.

[reggie the dog]

11. for some reason

i think your advice is better than the shit i was saying up thread

[Kolesar]

7. Babys boomer will be forced to sell their "equities" for money to live on

That is a *definite* downward pressure on stock prices.

[paparush]

14. Does anyone think this is part of why Obama has not "seized BP's US assets"

as I keep reading on DU that he should do?

Would taking that kind of action hasten/trigger a market collapse?