Lost decade

The good news is the TSX is now at its highest level since Sept. 26 of last year.

The bad news? It’s only lately that it retook the peak it first reached on Sept. 1, 2000.

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Lost decade

  1. The TSX peak first reached on Sept. 1, 2000 was hugely inflated by the overvalued Nortel. Not the most meaningful comparison.

    • Yeah, this is weak. A lost decade if you bought and held the index precisely 10 years ago. Doesn't account for any rebalancing, timing, etc… and it is certainly a very selective snapshot.

      Andrew, the reason I like your work so much is that you don't make these silly out of context points very often.

  2. The good news is that we're roughly two-thirds through this cycle of market stagnation. So get ready to start buying in 2014/15.

  3. Peak to peak is 8 yrs. I'll admit I don't know a great deal about the macroeconomic theory of business cycles, but it doesn't strike me that the lenght of this one is abnormal.

  4. Yay! My RRSPs are now the exact same value they were 10 years ago.

    err….

    Yay! Thanks to Dalton McGuinty, I no longer have to retire, cause I won't be able to afford it!

  5. Harper was right! Good buying opportunities last fall!
    Yoo Hoo, 40% + and looking good.

  6. The stock market in Canada, where there is no effective regulation, is a huge con. You may as well hand over your dough directly to known crooks.

  7. Post Bre-X (after which we brought in significant reforms such as National Instrument 43-101), are you able to point to a signficant stock market-related fraud that has taken place in Canada?

    I guess more to the point, do you have statistical or empirical evidence that suggests or proves that Canadian stock markets are more rife with fraud than stock markets in other major industrialized countries?

  8. Actually, TSX is only up 9% from the day Harper made that comment, October 7. Up until a few days ago, that suggestion was still underwater.

    • I don't believe Harper suggested buying the TSE index….he said there were good buying opportunities. You do have free will to choose amongst different stocks. All he suggested was that herd mentality had caused many good companies to become undervalued, which is undoubtedly true.

  9. The bad news is that even a journalist as intelligent and informed as Andrew Coyne suggests that it is only good news if the market is at lofty heights. For a transaction to take place, one needs a buyer and a seller. Each is eager to push the price in opposite direction to the other.

    The good news is that some investors know better, and recognize the severe irrational dips as buying opportunities, and the severe irrational bubbles as selling opportunities.

  10. Not if you rebalanced regularly…

  11. You're neglecting the value of dividends. If the TSX yielded 2.5% over that decade, you'd have what you had in 2000, plus 28% or so.

  12. Call me when unemployment in Ontario is down to 5%.

    • Don't hold your breath. I've read a lot of analysis to the effect that a good number of those auto (and related) sector jobs ain't coming back. Ever.

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