February 9, 2011   CONFIDENTIALInvesting in a Post Crash EconomySlides for the Wealth Management/Investment BankConference...
10 Steps to a Financial CrisisSource: Bailout Nation
Time Until Full Employment Recovery Post-Recession                                                                    Econ...
“100-Year Floods”      seems to come along       far more often than        their name impliesSource: Ritholtz.com, TheCha...
100 Years of Secular Markets, P/E Expansion & ContractionSource: Ritholtz.com, Crestmont Research
100
Year
Dow
Industrial
Chart
Source: Ritholtz.com, Bloomberg
1966-82 Cyclical Markets
Source: Ritholtz.com, Bloomberg
S&P500: 2009-10 Compared to 1973-74Source: Ritholtz.com, TheChartstore.com
Composite 19 Secular Bear MarketsSource: Ritholtz.com, Morgan Stanley Europe
Duration and Intensity of Bear Market RalliesRally averages over 12 and 24 months, going back to 1929After 12 months, retu...
War & Peace + Inflation + Secular Bull = 500% GainsSource: Ritholtz.com, Stock Trader’s Almanac
Recession Bear Market vs. ArmageddonSource: Ritholtz.com, Bloomberg
Looking Backwards: Downsizing AmericaSource: Ritholtz.com, February 2009
for more information, contactBarry L. RitholtzCEO, Director of Equity Research             Fusion IQ         535 Fifth Ave...
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UBS morning call

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Presentation to UBS wealth managers -- Long term market cycles, behavioral psychology, quantitative tools, Fusion IQ

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UBS morning call

  1. 1. February 9, 2011 CONFIDENTIALInvesting in a Post Crash EconomySlides for the Wealth Management/Investment BankConference callBarry Ritholtz, CEO Fusion IQ 1
  2. 2. 10 Steps to a Financial CrisisSource: Bailout Nation
  3. 3. Time Until Full Employment Recovery Post-Recession Economists are looking at the wrong data set: Instead of “ALL CYCLICAL RECESSIONS, try substituting CREDIT CRISIS RECESSIONS. Hence, why they seem to be perplexed by weak job creation and soft GDP.Source: Ritholtz.com, Calculated Risk
  4. 4. “100-Year Floods” seems to come along far more often than their name impliesSource: Ritholtz.com, TheChartstore.com
  5. 5. 100 Years of Secular Markets, P/E Expansion & ContractionSource: Ritholtz.com, Crestmont Research
  6. 6. 100
Year
Dow
Industrial
Chart
Source: Ritholtz.com, Bloomberg
  7. 7. 1966-82 Cyclical Markets
Source: Ritholtz.com, Bloomberg
  8. 8. S&P500: 2009-10 Compared to 1973-74Source: Ritholtz.com, TheChartstore.com
  9. 9. Composite 19 Secular Bear MarketsSource: Ritholtz.com, Morgan Stanley Europe
  10. 10. Duration and Intensity of Bear Market RalliesRally averages over 12 and 24 months, going back to 1929After 12 months, returns range from 21.4% (1987) to 121.4% (1932),followed by 81.4% (1935). Remove the post-depression outliers, and1982 becomes the next most intense move at 58.3%.That is, until the 2009 rally. After 12 months, it stood at 68.6%. Theaverage of these rallies at the 1 year mark was 47.3%.From one to two years, the rallies strengthened to 56.1%. Note that thetwo post-depression rallies eventually give up all their gains.(See S&P 90, lower right)2009 is now the outlier. After just 23 months, this market is up nearly100%. 1974 is the runner up at 65.7%.How intense is this rally? The current run is 50% greater than the next S&P 90 Roundtrips:closest one, and nearly 2X the 2 year average. 1932 ~~~ Bottom June 4th 1932 $4.21 Peak September 10 1923 $9.49 Low March 4, 1933 $5.47How much of this is attributable to the Fed? We can only guess, but ifonly half of the excess gains over prior rally averages are attributable Peak July 22 1933 $12.44to the Fed, it means that the US Central Bank has artificially createdseveral trillion dollars in market capitalization. 1935 Bottom March 23 1935 $8.02 Peak March 13 1937 $18.84 Low April 2 1938 $8.36Source: Ritholtz.com, Investech Research
  11. 11. War & Peace + Inflation + Secular Bull = 500% GainsSource: Ritholtz.com, Stock Trader’s Almanac
  12. 12. Recession Bear Market vs. ArmageddonSource: Ritholtz.com, Bloomberg
  13. 13. Looking Backwards: Downsizing AmericaSource: Ritholtz.com, February 2009
  14. 14. for more information, contactBarry L. RitholtzCEO, Director of Equity Research Fusion IQ 535 Fifth Avenue New York, NY 10017 212-661-2022 516-669-0369 britholtz@FusionInvest.com The Big Picture http://www.ritholtz.com/blog

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