Agoracom Blog

The Disastrous Financial Year And Decade In Charts – Who Can You Trust For 2010-2020? These Guys ….

Posted by AGORACOM at 5:51 PM on Thursday, December 31st, 2009

As we close out the year and the decade, there won’t be a shortage of (bullshit) commentary and analysis about the year and decade that was, so I won’t add to the clutter.  Suffice it to say, the following bulletin from CBS Marketwatch sums it all up when it comes to equity markets

1231 Bulletin

Frank Holmes summed it up as follows (via Kitco):

The decade that ends Thursday is on track to be the worst in recorded history for the U.S. stock market – worse than all of the many boom-and-bust cycles of the 19th century, worse than the Great Depression-era 1930s, worse than the recession-plagued 1970s.

The S&P 500 opened the decade at 1,469.25 on January 3, 2000. When the market closed on Christmas Eve, the S&P 500 stood at 1,125.46 – with four trading days left in the decade, the index’s annual performance over that span is negative 2.6 percent. The Dow Jones Industrials has lost about 1 percent per year over the same period, and the Nasdaq Composite is down a whopping 5.9 percent annually. When adjusted for inflation, the 10-year returns for these indices are even lower.


Holmes goes on to say:

A $100 investment in gold when the market opened on January 3, 2000, was worth about $380 as of this week (data through December 21) – that’s a total return of 280 percent and an annualized return of 14.3 percent. Gold stocks (as measured by the XAU Index) have also had a good decade, climbing 9.4 percent annually.

Commodities (as measured by the S&P GSCI Enhanced Total Return Index) posted average gains of 13.6 percent per year over the period, driven mostly by rapid economic growth in Asia and elsewhere in the developing world.

The following chart via Bloomberg shows you where the bright spots were over the past decade.

1231 Basket Decade

Bottom Line? Forget the plethora of “financial experts” parading themselves on TV.  How many CNBC guests over the past decade trumpeted gold and commodities (with the exception of oil) as the place to be?  How many of them had the faintest clue about the numerous signals of an impending market crash? Not many.

The ones with a clue, like AGORACOM Chief Commentator Peter Grandich or friends like Barry Ritholtz, Eric Coffin, Jean-Francois Tardif and Paul Kedrosky are too busy actually analyzing and delivering the straight goods via the web.   That means they PYMWYMI (Put Your Money Where Your Mouth Is) and put their reputations on the line.   They can’t hope that people forget about TV interviews.   These are the guys you trust for 2010 – 2020 … unless you want your returns to look like these 10 years from now.

DJIA – The Decade

1231 DJIA Decade

DJIA – The Year

1231 DJIA 2009

NASDAQ – The Decade

1231 NASDAQ Decade

NASDAQ – The Year

1231 NASDAQ Year

S&P 500 – The Decade

1231 SP500 Decade

S&P 500 – The Year

1231 SP500 Year


Giving myself just a few props, I’m proud to say I pounded the table 103 times over the past 3 years about the bullish future of gold thanks to skyrocketing debt which was clearly going to lead to >>> falling interest rates >>> falling $USD >>> higher inflation (still to come) and $1,000 gold.  As the charts clearly indicate below, gold has been a great place to be over the last 3 years and more.

Where to from here?  Clear as day, gold will continue to rise for the foreseeable future. Until the US gets its debt under control, interest rates will stay low and inflation will rise.  I don’t believe for a second that Bernanke and the Fed will be able to withstand the political pressure necessary to raise interest rates beyond a couple of token moves.  As such, I see a future of inflation and higher gold prices.

Gold – The Decade

1231 Gold Decade

Gold – The Year

1231 Gold Year


One Response to “The Disastrous Financial Year And Decade In Charts – Who Can You Trust For 2010-2020? These Guys ….”

  1. Nice to stumble upon a fellow Greek site with this kind of analysis. I’m writing from my iPhone in Athens so happy new year and looking forward to reading your blog in 2010!