Fund manager John Hussman embeds the following nugget in his comparison of the rally in the spring of 1930–the greatest suckers’ rally in history (see right)–with the one we’re enjoying today.
[W]e would be remiss not to consider the fact that investors were equally cheerful in early 1930, when the front page of the Wall Street Journal featured an article entitled “A Turn of the Tide Near” assuring investors:
“It cannot be imagined that the wholesale failures and interest defaults characteristic of earlier depressions will now be repeated. Confidence in our banking system wholly precludes the money panics of former eras.”
So let’s hope it’s different this time.
If you haven’t yet gone through Dan Alpert’s NYT clippings from the spring 1930 rally, don’t miss the following compilation. As a reminder: After crashing about 50% from the peak in the fall of 1929, the market rallied 50% in the spring of 1930. It then fell 85%, bottoming down nearly 90% from the original peak.