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Thursday, October 7, 2010

Straits Times Index Historical Chart from 1988 to 2010

There is this song we all know. "How low can you go?" Jack be nimble Jack be quick, Jack go under the limbo stick. Today, we ask "how high can you go?" That question is in everyone's mind these days.

So I had a thought and actually was asking this question: how high or low has the STI been doing the past year, the past decade? That question came out to play in my thesis in 1994 - Economics Independent Study: The Superbull Run in the Malaysian Stock Market.

From this historical chart, 1988 to 2010 - 20 over years of data you can see clearly the bigger picture.
Look and observe these trends and then re-analyse your stocks:
1988 to 1990, a nice steep increase (remember 1987 there was a big dip? It was the so-called the Black Monday)
1991 a dip.
1992 to 1993 went back to that plateau.
1994 a big climb.
1995 to 1997 plateau.
1998 a big crash.
1999 to 2000 a big return back to that plateau! (does this mirror today?)
2001 to 2002 a decline and big dip that went back up.
2003 going back to that dip.
2004 to 2006 consistent climbing.
2007 to 2008 steep climb.

It seems clear whichever "big crash", big stock market dip, big recession, 1997 Asian Financial Crisis, 2001 Dot Com Bust Up, 2008 USA Crisis, the market went back up to that previous level within 1 or 2 years. Obviously some stocks tanked out (the firm closed down!) While looking at the big picture, things became rosy in a relatively short time. Like a little oscillation. So during times of imminent trouble, it is not all doom and gloom. If you played your cards well, and hold your dependable cards well, you will eventually win out. Not wiped out.

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