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Note from dshort: I received an email request from Dylan to post an overlay of the mid 1960's-1982 secular bear with our current market.
The first chart is a overlay of the index price for the two periods excluding dividends. At first blush, the 2000 secular bear looks like the more savage beast.
Now let's adjust both for inflation using the BLS Consumer Price Index.
Most people, even first wave Boomers, don't realize the savagery of that earlier 14-year decline other than perhaps a recollection of the decade of stagflation that started with the 1973 oil embargo. The chart illustrates how both bears behaved over the decade following their peaks and how the stagflation bear continued its race to the bottom for another four-and-a-half years.
It will be interesting to check back in four years to see who wins this battle of the bears, especially if the Federal Reserve opens a Pandora's box of inflation with its next round of tinkering.
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