Now let's take a closer look. The Indicant
took it on the chin in the stock market crash, but not nearly as bad as
the buy and hold investor. At bear signal #1 in late 1929, the Indicant's
balance was $184,453. You will notice that after several trades, the
Indicant fell to $119,741. The Indicant is not yet a perfect model. Yes,
we are working on that.
Before you give up on the Indicant, take
another look. The Buy and Hold Investor from 1900 through 1932 has lost
money, while the Indicant investor has made nearly $120,000. A thirty year
old stock market investor in 1900 is now sixty-two years old and has less
than he or she did in 1900. The Indicant investor has ten times plus what
he or she had in 1900. The Indicant simulation can avoid this, but doing
so, triples the number of trades. The objective function of the Indicant
is maximize gains, minimize losses, and minimize trades. You will later
notice the Indicant performed very well with the NASDAQ's 2000-2002 crash
by avoiding 90% of that crash.
DJIA Index is congruent with presidential
election cycle's historical standards with the bearish post election year
of 1929.
Unfortunately, great bear markets, like great bull markets, show little
respect for historical standards. Each successive year in this
presidential election cycle was bearish.
You can see the market provided a bullish
response to a product of value, the automatic bread-slicer machine.
The market peaked with the politician's input as to how things should be
with the Smoot-Hawley tariff. Socialism was beginning and the parasitical
elite from the academia wanted to participate (although with their erroneous
prognostications). The Harvard professor missed his forecast by over thirty
years. Thousands of stock market investors paid the price for listening to
fictional predictions.
There are no stereotypes here. Several
college professors are good people; their product of value is the student.
Some of them were very influential in the incumbent author to this web
site. Even though they were paid, there remains a debt of gratitude to
them.
As you can see, the secular bull market terminated with the
Smoot-Hawley tariff. Politicians set the stage for World War II, as
tariffs allow a way for the non-producers to influence their
counter-productive measures in catering to the weak and eventually
destroying the quality of life around the world. That is one cause of war,
bloodshed, and world wide depressions; both mental and economic.
Remember, politicians only talk to the weak.
The strong are too busy working to pay them much attention. Politicians
like for the majority to be weak. That gave Hitler the room he needed to
politically prosper. FDR created millions of minimum wage jobs so he could
maintain power.
As you can see, the market reacted violently
to Smoot-Hawley. Yes, there are arguments that the market needed a
correction after the profound bull leg in the preceding presidential
election cycle. However, a near 90.0% drop is not a correction or a normal
bear market. It is
political interference to capitalistic desires and natural laws that
causes unnecessary pain and anguish. The laws of nature can deliver enough
of that on their own. Political influences only add salt to the wounds.
As you can see, the market did not anticipate
the depression. The stock market peaked at the time Smoot Hawley was
passed. The recession started immediately after that and orders from abroad dried up.
There are two kinds of people on this planet;
those that produce and those that don't.
As you can see, bullish seasonality (pink) is
incongruent to historical standards during the bearish market periods and
bearish seasonality (white) is also incongruent to historical standards
during bullish periods.
