Art Cashin: The 17 Year Market Cycle

Whether Art Cashin turns out to be correct or not...useful to think about longer time horizons like this.

From CNBC:

Cashin revisited his theory of "the 17.6-year cycle".

"It's like the Biblical story of the fat and lean years. During the fat, you can throw a dart at the wall, and anything you buy goes up."

He believes one such cycle spanned 1982 to 2000. And he notes that from "1966 to 1982, the Dow went to 1,000 — then went back down."

Stocks may go up 7-10% per year on average in the long run but historically they have extended periods when nothing happens* followed by long periods of returns well in excess of normal.
  • 1966-1982 the market went bounced around but essentially went nowhere (DJIA went from ~880 in 1966 to ~870 1982)
  • 1982-2000 the market went up more than 10 fold (DJIA went from ~870 in 1982 to ~10,900 in 2000)
The average annual return across those 34-35 years was in the range of normal (7.5%). Within those periods...anything but normal.

We are almost a decade into one of those possible 15-20 year sideways grinds that Art Cashin describes (Being roughly half way through would be the good news? I guess). I think Art's point is the market as a whole may continue to grind sideways for 5 to 10 more years (something like a range of DJIA 10,000 +/- 4,000 points or S&P 500 1,100 +/-400...the range we have been in for a decade already).

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Art Cashin: The 17 Year Market Cycle
Art Cashin: The 17 Year Market Cycle
Reviewed by jembe
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