Political  Calculations

Just for fun, we've adapted one of our analytical methods for forecasting stock prices and applied it to the stock market of the Roaring Twenties, which really ran from October 1925 up through September 1929:

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, October 1925 through August 1929, with September 1929

Keeping with our yesteryear analysis by taking only what someone in the 1920s might have known about our statistical control chart-inspired analytical methods into account (statistical control charts were invented by Walter Shewhart in the 1920s, it would still be years before Western Electric's rules for detecting breaks in trends would be well developed), the value of the S&P 500, or really, its predecessor index, in September 1929 would mark a very strong sell signal, indicating that stock prices were no longer "normal", while also being far above the mean.

What followed next in October 1929 is, as they say, history!...

S&P 500 Average Monthly Index Value vs Trailing Year Dividends per Share, October 1925 through June 1932

Political Calculations

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