Generation Y Investor » Stock Market http://generationyinvestor.com Gen Y's Home for Investment Education, News & Commentary Tue, 03 Nov 2009 01:42:13 +0000 http://wordpress.org/?v=2.8.1 en hourly 1 October 2009 Is Eerily Similar To October 2007 http://generationyinvestor.com/2009/10/19/october-2009-is-eerily-similar-to-october-2007/ http://generationyinvestor.com/2009/10/19/october-2009-is-eerily-similar-to-october-2007/#comments Mon, 19 Oct 2009 23:19:55 +0000 Stephen Kline http://generationyinvestor.com/?p=1069 Those who don’t learn from history are doomed to repeat it, that’s how the old cliché goes.  As the major stock indexes continue their march higher, some find that these iconic words of caution are particularly relevant in our current environment.  The argument can be made that the fundamentals unfolding presently are uncannily similar to [...]]]> Those who don’t learn from history are doomed to repeat it, that’s how the old cliché goes.  As the major stock indexes continue their march higher, some find that these iconic words of caution are particularly relevant in our current environment.  The argument can be made that the fundamentals unfolding presently are uncannily similar to those of October 2007 when the market topped out and went on to plunge 50%.

From Minyanville: October 2007 Shows Us How This Rally Ends

“I reexamined the bubble peak of October 2007 and “surprise, surprise” — it’s déjà vu all over again. If you recall, in October 2007 the US dollar was tanking and oil was ripping higher. The talk was about how the dollar had nowhere to go but down.

Sound familiar? It should because the dollar is tanking again and the talk is how the whole world is turning away from the dollar as the world’s reserve currency. Gold today is also making new highs just like it was back in October 2007, on the back of a weaker dollar.

The stock market in October 2007 was making new highs as the dollar tanked. It feels like déjà vu to me because today we have the dollar tanking, oil and gold breaking out, and stocks making new yearly highs.”

I posted these thoughts not to scare anyone, but to remind us not to be complacent.  It’s perfectly fine to enjoy the fruits of the recent rally; however, with each upward tick of the Dow and S&P 500, I see more and more people who seem to be forgetting the lessons 08/09 should have instilled in them.  Remember to stay humble… for if you don’t, the market will do it for you.

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