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Comparing Market Crashes: 2020 vs 1929, 1987, 2000 and 2008

Comparing Market Crashes

The older I get, the more value I find in seeing every day events from a very long term historical perspective. Especially when it comes to comparing market crashes, the rapid declines in stock prices in March 2020 were not quite “unprecedented”, and of course stockholders’ eventual outcomes depend on how well economies and corporate profits recover, and how other shareholders respond to them. That may sound like a simplistic explanation of a very complex environment, but markets, and the stocks we buy in them, have gone through many comparable periods of stress and uncertainty.

Below, I am sharing three of my recent articles:

1. How the crash of 2020 compares with the crashes of 1929, 1987, 2000, and 2009

2. Why it is pointless to try and catch the bottom, and why you should instead just buy when yields are good, and

3. An explanation on why buybacks aren’t “bad”, but rather the best alternative to paying a dividend when a company finds it better to shrink in order to maintain high profitability ratios, rather than try and stay big and become less profitable. The example I use over this past decade is McDonald’s.

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