The Nine-Month Idiot Maker Rally Won't Be Followed By Another One

 

This chart shows nine-month returns for the S&P 500 from Bespoke Investment Group.  It makes it pretty clear that we’ve just experienced the most spectacular periods for stocks since… yes… 1933.

 

Whether an idiot-maker, or idiot-made, equity holders made a ton of money, proving that, once again, when everyone is ultra-bearish, it’s time to buy. Even if the world is full of massive uncertainty.

Bespoke: Also, the 9-month 62% gain was preceded by a 9-month decline of 51%. The only time that the index fell more over a 9-month period was in 1931/32 when it dropped 68%. It’s easy to forget how crazy things were over the last 18 months, but stats like these provide a staggering refresher.
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Yet at the same time, it’s highly improbable that the next nine-months will be able to beat what we just experienced. Thus this chart provides fuel for today’s bears as well — it’s obvious that after any huge run, there comes an inevitable correction.

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