And everyone's happy for some reason.
When you consider that the mean for the whole history of the index is 123 and the median 120, which include the irrational exuberance of recent history, today's new low of 128 after this massive, outlier, bubble merely looks like more progress in the direction of regression toward the mean, not a "bottom" as many are saying. Indeed, the historical mean implies we have a fair way DOWN to go in price, to say nothing of the very real possibility of overshooting that to the downside.
The quarterly index, adjusted for inflation, has now hit today's level eight times in the post-war period:
Dec. 31, 2011 128.13
Mar. 31, 1999 128.40
Dec. 31, 1990 128.27
Dec. 31, 1979 128.78
Sep. 30, 1978 128.22
Dec. 31, 1955 128.21
Mar. 31, 1955 128.15
Dec. 31, 1954 128.30.
There's enough history between 110 and 130 to suggest that "normal" is still somewhere south of 128.
Take two aspirin every morning and call me in ten years.
Go here for the chart.
