2000-2003 Downturn

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invest2bfree
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2000-2003 Downturn

Post by invest2bfree »

I just wanted to give a brief synopsis of what happened in 2000-2003 so people understand how these things play out. People are asking light at the end of the tunnel too fast.

Top happened in 03/2000 but markets did not break until 08/28/2000.

From 08/28/2000 to March 28, 2001 a span of 7 months the markets fell 20%.

09/11/2001 happened and markets fell another 10%. It rallied 10% back to 03/2002.

Then it bottomed in 09/2002 with a total sell off 44%.

It again double bottomed in 03/2003. So peak to trough it took thirty months.

Iam not saying this downturn is going to be as severe but be prepared for this turn.

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rgs92
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Re: 2000-2003 Downturn

Post by rgs92 »

That was because of the Enron and Worldcom scandals and the corporate corruption scares. That's how we got Sarbanes-Oxley.
It was a very big deal and caused a massive loss of confidence in the entire business community at the time.
People don't remember how serious this was.
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Re: 2000-2003 Downturn

Post by drk »

Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
  • Peloton: down 90% from its all-time high
  • Zoom: down 80%
  • Shopify: down 78%
  • Netflix: down 74%
  • Etsy: down 71%
These companies have actual business models providing actual services to actual recurring customers. Other than Peloton, they're all profitable.
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Re: 2000-2003 Downturn

Post by Triple digit golfer »

It proves how futile it is to try to say what's going to happen in real time. Imagine how many times people called the bottom during a 3 year peak to trough. Staying the course and simply investing and ignoring it all worked out great.
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Re: 2000-2003 Downturn

Post by nisiprius »

invest2bfree wrote: Sun May 08, 2022 8:10 pm...So peak to trough it took thirty months...
Image

It's sort of a technicality, but according to Morningstar's tabulation of stock market declines, measured in real terms and including dividends, the stock market actually did not quite recover to year-2000 levels in 2007. According to their way of measuring, 2000-2003 and 2008-2009 were actually a single downturn, with the true bottom in 2009. Peak-to-trough was Aug 2000 - Feb 2009, or over eight years, and recovery did not occur until May 2013.
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Re: 2000-2003 Downturn

Post by richard.h.gao »

invest2bfree wrote: Sun May 08, 2022 8:10 pm Iam not saying this downturn is going to be as severe but be prepared for this turn.
This downturn will be much worse because this time the fed won't be able to bail us out. Imagine 2000-2003 but with no bottom.
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Re: 2000-2003 Downturn

Post by ApeAttack »

richard.h.gao wrote: Sun May 08, 2022 9:43 pm
invest2bfree wrote: Sun May 08, 2022 8:10 pm Iam not saying this downturn is going to be as severe but be prepared for this turn.
This downturn will be much worse because this time the fed won't be able to bail us out. Imagine 2000-2003 but with no bottom.
If you truly believe that, you should sell all your stocks now and buy back when we hit the max drawdown percentage from 2000-2003.
Just another lazy index investor.
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Re: 2000-2003 Downturn

Post by invest2bfree »

ApeAttack wrote: Sun May 08, 2022 10:18 pm
richard.h.gao wrote: Sun May 08, 2022 9:43 pm
invest2bfree wrote: Sun May 08, 2022 8:10 pm Iam not saying this downturn is going to be as severe but be prepared for this turn.
This downturn will be much worse because this time the fed won't be able to bail us out. Imagine 2000-2003 but with no bottom.
If you truly believe that, you should sell all your stocks now and buy back when we hit the max drawdown percentage from 2000-2003.
Nobody knows, so at least 50% stocks is recommended.
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Re: 2000-2003 Downturn

Post by invest2bfree »

ApeAttack wrote: Sun May 08, 2022 10:18 pm
richard.h.gao wrote: Sun May 08, 2022 9:43 pm
invest2bfree wrote: Sun May 08, 2022 8:10 pm Iam not saying this downturn is going to be as severe but be prepared for this turn.
This downturn will be much worse because this time the fed won't be able to bail us out. Imagine 2000-2003 but with no bottom.
If you truly believe that, you should sell all your stocks now and buy back when we hit the max drawdown percentage from 2000-2003.
Nobody knows, so at least 50% stocks is recommended.
atdharris
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Re: 2000-2003 Downturn

Post by atdharris »

No one knows, but so far we do not have catalysts like the 2000-2003 market to hurt investors like we did with Enron/Worldcom etc; and don't forget 9/11 caused more market pain in late 2001.

A lot of these tech companies that have been slaughtered this time around are profitable and have actual revenue growth and customers. That was not the case in 2000 for most tech companies.
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Re: 2000-2003 Downturn

Post by stocknoob4111 »

00-03 crash and recovery visualization. It was loonnnng and painful.... Markets finally recovered seven years later but that was very short lived after another session all over again, one crazy crazy decade!!! :shock:

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rascott
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Re: 2000-2003 Downturn

Post by rascott »

Are we even down as much as the (almost) bear market of 2018? I don't know what relevance 2000 has to anything today.
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Re: 2000-2003 Downturn

Post by Nathan Drake »

atdharris wrote: Mon May 09, 2022 1:22 pm No one knows, but so far we do not have catalysts like the 2000-2003 market to hurt investors like we did with Enron/Worldcom etc; and don't forget 9/11 caused more market pain in late 2001.

A lot of these tech companies that have been slaughtered this time around are profitable and have actual revenue growth and customers. That was not the case in 2000 for most tech companies.
That was the case for many tech stocks, actually.

Microsoft and Cisco were real businesses with profits and revenues, yet had a large and sustained correction

Sometimes things just get wildly overvalued

And depending on how things turn out, the Ukraine situation may be the catalyst for long term fears in the market
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Re: 2000-2003 Downturn

Post by willthrill81 »

Yes, it's true that people are panicking far too early in this market, which isn't even yet a bear market by technical terms. The market was at an ATH just about 5 months ago.

It can take a decade for the market to fully recover.

Regarding 2000-2003, small-cap value stocks did quite handsomely. Vanguard's VISVX returned 10.5% real annualized during that period. And SCV has not declined nearly as much as the S&P 500 has this year.
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Re: 2000-2003 Downturn

Post by GAAP »

A quick look at how bad it has gotten since 1972 from PV (Total US Stock Market):

Code: Select all

Drawdowns for Historical Market Stress Periods
Stress Period		Start		End		US Stock Market
Oil Crisis		Oct 1973	Mar 1974	-12.61%
Black Monday Period	Sep 1987	Nov 1987	-29.34%
Asian Crisis		Jul 1997	Jan 1998	-3.72%
Russian Debt Default	Jul 1998	Oct 1998	-17.57%
Dotcom Crash		Mar 2000	Oct 2002	-44.11%
Subprime Crisis		Nov 2007	Mar 2009	-50.89%
COVID-19 Start		Jan 2020	Mar 2020	-20.89%

Code: Select all

Drawdowns for US Stock Market (worst 10)
Rank	Start		End		Length			Recovery By	Recovery Time		Underwater Period	Drawdown

							
1	Nov 2007	Feb 2009	1 year 4 months		Mar 2012	3 years 1 month		4 years 5 months	-50.89%
2	Jan 1973	Sep 1974	1 year 9 months		Dec 1976	2 years 3 months	4 years			-45.86%
3	Sep 2000	Sep 2002	2 years 1 month		Apr 2006	3 years 7 months	5 years 8 months	-44.11%
4	Sep 1987	Nov 1987	3 months		May 1989	1 year 6 months		1 year 9 months		-29.34%
5	Jan 2020	Mar 2020	3 months		Jul 2020	4 months		7 months		-20.89%
6	Dec 1980	Jul 1982	1 year 8 months		Oct 1982	3 months		1 year 11 months	-17.85%
7	Jul 1998	Aug 1998	2 months		Nov 1998	3 months		5 months		-17.57%
8	Jun 1990	Oct 1990	5 months		Feb 1991	4 months		9 months		-16.20%
9	Oct 2018	Dec 2018	3 months		Apr 2019	4 months		7 months		-14.28%
10	Jan 2022	Apr 2022	4 months				-14.01%
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Topic Author
invest2bfree
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Re: 2000-2003 Downturn

Post by invest2bfree »

We are just 7 months into this mess.

If history is a guide we have at least a year to go.

In our case Fed is still raising rates.

In 2000 Greenspan started cutting lot earlier.

https://fred.stlouisfed.org/series/FEDFUNDS
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invest2bfree
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Re: 2000-2003 Downturn

Post by invest2bfree »

Looks like this is exactly following the same 2003 playbook.

44% down is around 3150, so we should bottom around 2800-3200.

What is concerning is Fed is still raising rates.
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Re: 2000-2003 Downturn

Post by Capster1 »

And that was over 20 years ago..
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Re: 2000-2003 Downturn

Post by Kookaburra »

I hope that there are many more FFR increases ahead. The system needs it.
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Re: 2000-2003 Downturn

Post by jbriar »

Triple digit golfer wrote: Sun May 08, 2022 9:06 pm It proves how futile it is to try to say what's going to happen in real time. Imagine how many times people called the bottom during a 3 year peak to trough. Staying the course and simply investing and ignoring it all worked out great.
totally dependent on your time horizon and on how much you have in stocks, a lot of people on here (not me) have 100% assets in stocks, taking a 50-70% drop that takes 7+ years to just get back to even really does not work out great for many.
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Re: 2000-2003 Downturn

Post by Triple digit golfer »

jbriar wrote: Sat Nov 19, 2022 11:30 am
Triple digit golfer wrote: Sun May 08, 2022 9:06 pm It proves how futile it is to try to say what's going to happen in real time. Imagine how many times people called the bottom during a 3 year peak to trough. Staying the course and simply investing and ignoring it all worked out great.
totally dependent on your time horizon and on how much you have in stocks, a lot of people on here (not me) have 100% assets in stocks, taking a 50-70% drop that takes 7+ years to just get back to even really does not work out great for many.
Those people should not be 100% stocks.
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Re: 2000-2003 Downturn

Post by JBTX »

One thing characteristic of the post 2000 bust was diversifying and factor investing definitely helped. I had some small cap value and REITS and value and in general those did quite well. After a couple of years then international made a good run.

Contrast that with 2008 where everything went to crap, except treasuries.
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Re: 2000-2003 Downturn

Post by sandan »

JBTX wrote: Sat Nov 19, 2022 12:58 pm One thing characteristic of the post 2000 bust was diversifying and factor investing definitely helped. I had some small cap value and REITS and value and in general those did quite well. After a couple of years then international made a good run.

Contrast that with 2008 where everything went to crap, except treasuries.
I think that's the real reason people are spooked in 2022. They thought their diversified (60/40 or 40/60) portfolio could never drop 20%. At the same time their dream LCOL retirement home in the swamp or dessert has doubled.

I think a minor difference this time for the younger folks that own stock is that a lot more people have work related income based on stock performance at the companies that have tanked. People grew to rely on those for their normal cash flow.
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Re: 2000-2003 Downturn

Post by JBTX »

sandan wrote: Sat Nov 19, 2022 7:05 pm
JBTX wrote: Sat Nov 19, 2022 12:58 pm One thing characteristic of the post 2000 bust was diversifying and factor investing definitely helped. I had some small cap value and REITS and value and in general those did quite well. After a couple of years then international made a good run.

Contrast that with 2008 where everything went to crap, except treasuries.
I think that's the real reason people are spooked in 2022. They thought their diversified (60/40 or 40/60) portfolio could never drop 20%. At the same time their dream LCOL retirement home in the swamp or dessert has doubled.

I think a minor difference this time for the younger folks that own stock is that a lot more people have work related income based on stock performance at the companies that have tanked. People grew to rely on those for their normal cash flow.
One of my biggest concerns has always been a 70s style inflation around the time I retire. That may or may not be playing out now.
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Re: 2000-2003 Downturn

Post by sandan »

JBTX wrote: Sat Nov 19, 2022 7:16 pm
sandan wrote: Sat Nov 19, 2022 7:05 pm
JBTX wrote: Sat Nov 19, 2022 12:58 pm One thing characteristic of the post 2000 bust was diversifying and factor investing definitely helped. I had some small cap value and REITS and value and in general those did quite well. After a couple of years then international made a good run.

Contrast that with 2008 where everything went to crap, except treasuries.
I think that's the real reason people are spooked in 2022. They thought their diversified (60/40 or 40/60) portfolio could never drop 20%. At the same time their dream LCOL retirement home in the swamp or dessert has doubled.

I think a minor difference this time for the younger folks that own stock is that a lot more people have work related income based on stock performance at the companies that have tanked. People grew to rely on those for their normal cash flow.
One of my biggest concerns has always been a 70s style inflation around the time I retire. That may or may not be playing out now.
I can see that. Part of the last 100 year boom in the stock & bond market is related to exploiting the environment and people.

Its going to be tough to be environmentally "neutral", without costs going up (or our buying power go down).
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Re: 2000-2003 Downturn

Post by grabiner »

JBTX wrote: Sat Nov 19, 2022 7:16 pm One of my biggest concerns has always been a 70s style inflation around the time I retire. That may or may not be playing out now.
One difference is that you now have TIPS and I-Bonds available to protect against losing purchasing power if that happens. Investors who bought Treasury bonds in 1970-1973 took large real losses as inflation destroyed the value of the principal.
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Re: 2000-2003 Downturn

Post by sureshoe »

drk wrote: Sun May 08, 2022 9:05 pm Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
Curious what makes it "obvious".

Today could be the lowest the market ever is for the next 500 years.
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Re: 2000-2003 Downturn

Post by jbriar »

sureshoe wrote: Mon Nov 21, 2022 12:27 pm
drk wrote: Sun May 08, 2022 9:05 pm Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
Curious what makes it "obvious".

Today could be the lowest the market ever is for the next 500 years.
It's not obvious, but assuming we will not have a big decline from here is setting yourself up for disappointment. I'd rather be wrong on the upside and prepare for the worst.
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Re: 2000-2003 Downturn

Post by drk »

sureshoe wrote: Mon Nov 21, 2022 12:27 pm
drk wrote: Sun May 08, 2022 9:05 pm Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
Curious what makes it "obvious".

Today could be the lowest the market ever is for the next 500 years.
I think you overlooked an important word in that comment because it wasn't saying anything about what would happen.

Consider checking the posted date, too. :wink:
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Re: 2000-2003 Downturn

Post by sureshoe »

jbriar wrote: Mon Nov 21, 2022 12:36 pm
sureshoe wrote: Mon Nov 21, 2022 12:27 pm
drk wrote: Sun May 08, 2022 9:05 pm Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
Curious what makes it "obvious".

Today could be the lowest the market ever is for the next 500 years.
It's not obvious, but assuming we will not have a big decline from here is setting yourself up for disappointment. I'd rather be wrong on the upside and prepare for the worst.
Regardless, do we believe a "big decline" is more likely today than it was 2 years ago or will be 2 years in the future?
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Re: 2000-2003 Downturn

Post by sureshoe »

drk wrote: Mon Nov 21, 2022 12:42 pm
sureshoe wrote: Mon Nov 21, 2022 12:27 pm
drk wrote: Sun May 08, 2022 9:05 pm Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
Curious what makes it "obvious".

Today could be the lowest the market ever is for the next 500 years.
I think you overlooked an important word in that comment because it wasn't saying anything about what would happen.

Consider checking the posted date, too. :wink:
Hah, well played.
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Re: 2000-2003 Downturn

Post by jbriar »

sureshoe wrote: Mon Nov 21, 2022 12:42 pm
jbriar wrote: Mon Nov 21, 2022 12:36 pm
sureshoe wrote: Mon Nov 21, 2022 12:27 pm
drk wrote: Sun May 08, 2022 9:05 pm Obviously we might have a ways to go before the market finds a bottom, but I'm guessing that we already have this cycle's answer to the Dot-Com bust's Cisco. Among the pandemic darlings that have been absolutely crushed, my favorites:
Curious what makes it "obvious".

Today could be the lowest the market ever is for the next 500 years.
It's not obvious, but assuming we will not have a big decline from here is setting yourself up for disappointment. I'd rather be wrong on the upside and prepare for the worst.
Regardless, do we believe a "big decline" is more likely today than it was 2 years ago or will be 2 years in the future?
Trying to guess the market and how today is different then two years ago- 5%ish Fed funds rate instead of zero, Fed tightening, instead of easing. A war in Europe. The period of cheap money that has pumped up this market and propped up companies that should not have even gone public is over. 2 years in the future hopefully we will be back to a more normal market but likely much lower valuations.
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Re: 2000-2003 Downturn

Post by jbriar »

nisiprius wrote: Sun May 08, 2022 9:16 pm
invest2bfree wrote: Sun May 08, 2022 8:10 pm...So peak to trough it took thirty months...
Image

It's sort of a technicality, but according to Morningstar's tabulation of stock market declines, measured in real terms and including dividends, the stock market actually did not quite recover to year-2000 levels in 2007. According to their way of measuring, 2000-2003 and 2008-2009 were actually a single downturn, with the true bottom in 2009. Peak-to-trough was Aug 2000 - Feb 2009, or over eight years, and recovery did not occur until May 2013.
Aug 00 to May 13 is a long time for a recovery, I have heard some say this could be worse, drop lower and take longer to recover. Tough deal for buy n' hold in stocks if you are not also accumulating but hopefully it will not happen. Rationalized hopium is definitely not the answer.
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Re: 2000-2003 Downturn

Post by Archie Bunker »

sandan wrote: Sat Nov 19, 2022 7:05 pm I think that's the real reason people are spooked in 2022. They thought their diversified (60/40 or 40/60) portfolio could never drop 20%.
Wasnt this year the worst in something like 100 years for the 60/40 type portfolio?
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Re: 2000-2003 Downturn

Post by Archie Bunker »

jbriar wrote: Mon Nov 21, 2022 6:46 pm Tough deal for buy n' hold in stocks if you are not also accumulating but hopefully it will not happen. Rationalized hopium is definitely not the answer.
I have always been a buy and hold type more or less, but as one gets older this strategy starts to become a bit more difficult (as eventually one has to sell something) and the timing of the inevitable downturns becomes rather critical. The one thing I thing many of us may fear is the proverbial lost decade occurring during a period where we personally are either close to (or in the home stretch towards) retirement. I already know of one person who has rescinded their retirement papers at work for 2023 due to the markets. Hes had no real refuge as all of the traditional approaches have not worked well this year it seems.
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Re: 2000-2003 Downturn

Post by phxjcc »

rgs92 wrote: Sun May 08, 2022 8:26 pm That was because of the Enron and Worldcom scandals and the corporate corruption scares. That's how we got Sarbanes-Oxley.
It was a very big deal and caused a massive loss of confidence in the entire business community at the time.
People don't remember how serious this was.
This is correct.

The financial gymnastics (AHEM!) during the "internet bubble" were downright dishonest.

5+ year deals were signed that only showed profit in the last 6 months-1 year; however, ALL of that profit was shown on the books and forecasts for the current year/quarter. This was standard across many F500 companies. When S-Ox came in, CFO's (et al) had to sign the financial statements with criminal penalty for misstatements. Our stock dropped 50% as the "E" in the P/E ratio disappeared mysteriously overnight. I believe there was also a change in FASB vs. GAAP accounting standards and protocols for amortizing technology development costs.

Parenthetically, and what will probably get me a Moderator reprimand, many domestic analysts think (and some accuse) the Chinese government of currently doing this same, err, obfuscation in their markets.
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Re: 2000-2003 Downturn

Post by jbriar »

Archie Bunker wrote: Tue Nov 22, 2022 1:31 pm
jbriar wrote: Mon Nov 21, 2022 6:46 pm Tough deal for buy n' hold in stocks if you are not also accumulating but hopefully it will not happen. Rationalized hopium is definitely not the answer.
I have always been a buy and hold type more or less, but as one gets older this strategy starts to become a bit more difficult (as eventually one has to sell something) and the timing of the inevitable downturns becomes rather critical. The one thing I thing many of us may fear is the proverbial lost decade occurring during a period where we personally are either close to (or in the home stretch towards) retirement. I already know of one person who has rescinded their retirement papers at work for 2023 due to the markets. Hes had no real refuge as all of the traditional approaches have not worked well this year it seems.
Sorry to hear that, traditional approaches have failed, this year proves that and non-traditional TAA strategies might be the answer but are relatively new and most people have trouble adapting to them mentally as they require more involvement even if it is just 3 trades per year. I think in the future this will change but will happen slowly. Maybe another lost decade of zero to negative returns may speed up the process. Sitting thru even a 30% drawdown when you are on the doorstep of retirement sounds stressful, worrying that it will drop further.
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Re: 2000-2003 Downturn

Post by Archie Bunker »

jbriar wrote: Tue Nov 22, 2022 4:38 pm Maybe another lost decade of zero to negative returns may speed up the process. Sitting thru even a 30% drawdown when you are on the doorstep of retirement sounds stressful, worrying that it will drop further.
If I was him my hopes would be-----

We get another run up towards EOY and if he can bail (aka partial recovery) take it and run and accept the revised retirement plan (if he really does desire strongly to retire).

Alternately, his other choice may be to just accept working for another X number of years. Honestly, that would stink but sometimes that just how this stuff works out.

I am getting closer to that point (as I am going to have to decide in the next year or two if I try for an earlyish retirement, or just plan til 62+. Ill probably end up just letting the market decide in the next 2-3 years.......The decision on which path to take will unfortunately be a one way ticket. But, the fact that this is even an option is a good thing (and I fortunately have a good job that I 99% enjoy).
jbriar
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Re: 2000-2003 Downturn

Post by jbriar »

Archie Bunker wrote: Tue Nov 22, 2022 5:30 pm
jbriar wrote: Tue Nov 22, 2022 4:38 pm Maybe another lost decade of zero to negative returns may speed up the process. Sitting thru even a 30% drawdown when you are on the doorstep of retirement sounds stressful, worrying that it will drop further.
If I was him my hopes would be-----

We get another run up towards EOY and if he can bail (aka partial recovery) take it and run and accept the revised retirement plan (if he really does desire strongly to retire).

Alternately, his other choice may be to just accept working for another X number of years. Honestly, that would stink but sometimes that just how this stuff works out.

I am getting closer to that point (as I am going to have to decide in the next year or two if I try for an earlyish retirement, or just plan til 62+. Ill probably end up just letting the market decide in the next 2-3 years.......The decision on which path to take will unfortunately be a one way ticket. But, the fact that this is even an option is a good thing (and I fortunately have a good job that I 99% enjoy).
Retirement is a concept pushed hard by the financial industry but if you enjoy what your doing and get paid for it then what is the benefit of full retirement? Maybe it's about diversifying your time and just working part time if you enjoy it and spending more time with loved ones, relaxing the rest of the time. The push for remote work would help in this regard but you lose that social component which i think is undervalued these days. I have trouble sticking with hobbies but will always want to work a little bit at least...........so I guess I will fully retire when I am dead.
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Re: 2000-2003 Downturn

Post by MichRoots »

The Dow went from 11300 or so to 8300 so I don't think that was even a 30% loss. It was the Nasdaq that broke going from 5000 to 1100.

But the nasdaq went exponential before the drop, I think it doubled from 2500 to 5000 in 8 months or so. I am too lazy to look it up. The nasdaq went from 1100 to 5000 in maybe 4 years so the 80% drop was just a reversal of ridiculous gains.
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Re: 2000-2003 Downturn

Post by grabiner »

MichRoots wrote: Tue Nov 22, 2022 9:47 pm The Dow went from 11300 or so to 8300 so I don't think that was even a 30% loss. It was the Nasdaq that broke going from 5000 to 1100.

But the nasdaq went exponential before the drop, I think it doubled from 2500 to 5000 in 8 months or so. I am too lazy to look it up. The nasdaq went from 1100 to 5000 in maybe 4 years so the 80% drop was just a reversal of ridiculous gains.
Neither of these indexes is representative of the market. The Dow Jones average has a value bias, while the Nasdaq is mostly technology. A better way to estimate the severity of a decline is with a broad-market index. Vanguard Total Stock Market Index lost almost half its value from the March 2000 peak to the October 2002 bottom.
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Re: 2000-2003 Downturn

Post by MichRoots »

grabiner wrote: Tue Nov 22, 2022 10:48 pm
MichRoots wrote: Tue Nov 22, 2022 9:47 pm The Dow went from 11300 or so to 8300 so I don't think that was even a 30% loss. It was the Nasdaq that broke going from 5000 to 1100.

But the nasdaq went exponential before the drop, I think it doubled from 2500 to 5000 in 8 months or so. I am too lazy to look it up. The nasdaq went from 1100 to 5000 in maybe 4 years so the 80% drop was just a reversal of ridiculous gains.
Neither of these indexes is representative of the market. The Dow Jones average has a value bias, while the Nasdaq is mostly technology. A better way to estimate the severity of a decline is with a broad-market index. Vanguard Total Stock Market Index lost almost half its value from the March 2000 peak to the October 2002 bottom.
No doubt. The total market index is pretty much a combination of the nasdaq with the Dow. So dow <30, nasdaq <80 = total market <55. I can see this in daily market conditions today. The SP500 is almost always up or down by the average of the Dow plus nasdaq daily change.

My point was more of the nasdaq is responsible for the total market runs and drops far more than the Dow stocks which are very conservative. And while nasdaq was high earlier this year and maybe still is, it is not at stratospheric levels like it was in 2000.
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Re: 2000-2003 Downturn

Post by sandan »

Archie Bunker wrote: Tue Nov 22, 2022 1:26 pm
sandan wrote: Sat Nov 19, 2022 7:05 pm I think that's the real reason people are spooked in 2022. They thought their diversified (60/40 or 40/60) portfolio could never drop 20%.
Wasnt this year the worst in something like 100 years for the 60/40 type portfolio?
This article says there were a few other years that topped the list. https://www.marketwatch.com/story/the-w ... 1663342923

The massive difference between the 2000-2009 vs 2022 is the swing of the dollar.
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