A.I.M. Users Bulletin Board

[aaCharley]

Clive,
The compressed time scale on the chart does not really show how painful the decline was. The intermediate rallies were the ones that caught so many and wiped them out even worse.

That up move from 200 to 300 at the end of '29 gave investors hope enough to leverage up and put more into the market to "make it all back" and get even. Following decline wiped them out even worse.

There were several 50% or greater rallies on the way to final bottom of about 35, IIRC. Even after that note that the first big rally up to about 75 or so was a 100% rally. That one then had another 30% decline to 50. It was that one that did the absolute final wipeout damage. Those who had missed the earlier wipeouts on the rallies were whacked the worst in the '32 - '33 decline.

IIRC, the unemployment rate was still obut 15% in 1939 after all of the FDR programs had been effect for about 8 years. The chart really does not show the pain (from the dashed hopes in rallies) that was associated with generating those bars on the chart. The other consideration is that this is showing averages of companies that continued to exist.