Rock Bottom

It was 27 years ago last week that the market hit its bottom in the 1981-1982 bear market. That market had seen stock prices fall to rock bottom valuations and yet, no one wanted to own stocks that summer. To think, Philip Morris at 6 times earnings and yielding 8%. The environment then was horrendous. Interest rates on long-term Treasury bonds were still at 12%, down from 15% in late 1981. The prime rate had fallen to 17% from over 20%. If you wanted a mortgage loan, you had to pay 18% or better. Unemployment was over 10.5% and still rising. Business Week magazine argued that stocks were dead. That was the bottom of a life time, unless you managed to live long enough to see the low earlier this year. Read more