{"id":79385,"date":"2015-10-09T08:24:31","date_gmt":"2015-10-09T12:24:31","guid":{"rendered":"http:\/\/countingpips.com\/?p=79385"},"modified":"2015-10-09T08:24:31","modified_gmt":"2015-10-09T12:24:31","slug":"outside-the-box-blodget-on-market-history","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/10\/outside-the-box-blodget-on-market-history\/","title":{"rendered":"Outside the Box: Blodget on Market History"},"content":{"rendered":"
October 9, 2015<\/div>
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By John Mauldin<\/span><\/h4>\n
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I remember the first time I walked into Henry Blodget\u2019s new startup, Business Insider, back in 2009. Twelve fresh-faced kids were crammed into a room about the size of my bedroom, pounding away on laptops, creating a new destination website. He took me over to a corner; we sat down in front of a few cameras; and he began shooting question after question at me, later turning the session into a series of interviews.<\/p>\n

You walk into his office today and it\u2019s still packed wall-to-wall with fresh-faced kids (the older I get the younger they look), but the offices are much larger, and it seemed to me last time that there had to be at least 150 people in them. But the interviews are still quick-paced, even if they\u2019re now conducted in a special room, with upgraded equipment.<\/p>\n

One of the things Business Insider is noted for is compelling headlines. They republish much of the work from Mauldin Economics, but they often come up with more interesting headlines for our content than we do. And they still produce a lot of original material as well.<\/p>\n

This week\u2019s Outside the Box<\/em> is a brief note from Henry himself, with the snappy title \u201cMarket history is calling, and it\u2019s saying stock performance will be crappy for another ~10 years.\u201d Beyond the compelling headline is a look back at historical market performance and market cycles, with almost a dozen charts to illustrate Henry\u2019s thesis. It\u2019s a quick read, but investors should pay attention to his main premise: if you\u2019re looking for returns that are north of zero, you\u2019re going to have to be a better-than-average investor.<\/p>\n

As an aside, I want to pass along my congratulations to Henry on the rather outsized offer (in the multiple nine figures) he has received from a German publisher for his business. I\u2019ve always admired his determination and focus, and I enjoy watching another businessman prosper.<\/p>\n

Now here\u2019s a good one for you. I\u2019m sitting in my dentist\u2019s chair this morning, he\u2019s checking on the laser-evisceration of my gums he performed last week, and he says, \u201cYou know, most older people have the opposite problem from you \u2013 they have too little in the way of gums, not too much. And that\u2019s where we got the old saying \u2018long in the tooth.\u2019\u201d So there.<\/p>

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It\u2019s been a busy though uneventful week here at home; hope you\u2019re easing into autumn, too.<\/p>\n

Your no longer short in the tooth analyst,<\/p>\n

John Mauldin, Editor
\nOutside the Box<\/em>subscribers@mauldineconomics.com<\/a><\/p>\n

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Market history is calling, and it\u2019s saying stock performance will be crappy for another ~10 years<\/strong><\/span><\/h2>\n

By Henry Blodget<\/strong>
\nBusiness Insider, Oct. 4, 2015<\/strong><\/p>\n

Stock performance has been weak\u00a0for the past 15 years.<\/p>\n

If history is a guide, it\u2019s likely to stay weak for at least another 10 years.<\/p>\n

Why?<\/p>\n

Because stocks are still fantastically expensive relative to most of recorded history.<\/p>\n

And in the past, when stocks have been this expensive \u2013 or close to this expensive \u2013 performance over the next decade has been lousy.<\/p>\n

Long-term valuation analysis suggests that we are still working through aftermath of the highest level of stock-market valuation in history \u2013 the peak of the tech bubble in 2000 \u2013 and that this workout process will take at least another 5-10 years.<\/p>\n

That\u2019s the bottom line.<\/p>\n

The Details<\/span><\/h3>\n

Over the past century, the market has gone through distinct \u201cbull\u201d and \u201cbear\u201d phases. These last, on average, 10-25 years each. Specifically:<\/p>\n