In the 2000-2001 recession, the S&P 500 lost the following in each of quarter of 2001: -23.2%, -39.4%, -35.4%, -24.2%.
In the 1969 – 1970 downturn, the quarterly losses from Q4 1969 – Q4 1970 were: -7.5%, -10.3%, -7.5%, -11.7%, -14.5%. Not as bad that time.
I don’t have the data for the other recessions.
In any case, you two have to ask yourselves this: which stocks went up and earned more than CDs, without taking on any more risk, AT THE SAME TIME that the quarterly loss in the S&P500 was anywhere from 7.5 – 39.4%. That is a tall order. If you can pull that off, you can earn millions on Wall Street. Document your portfolio, and then show it to the traders when this is all over, so you can build your legacy. The odds are certainly against you.
I researched this spring which stocks to buy during a recession. The problem is everything is so darn overvalued right now. Storage places and pawn shops are two of the best recession proof industries, but at 25 x earnings, no way am I interested.
If we had a 35% decline in 2001, which was a very mild recession (and the 1969-70 was just a downturn not a recession), a 50% drop is very likely.
Now the ball is in your court to show how any stock can rise more than the risk-free yield on CDs, at a time when housing starts are falling over 25% year over year, which has led to a recession every time except when we were engaged in an expensive war. In the history of our markets, has this ever happened? Not to my knowledge.
What sector is going up? Where can you earn more than risk-free 5.5%? Anywhere? I have been posting about this since February at least, and I nobody has given any answers, other than shorting which I won’t do. If someone has some ideas, I am all ears…