[bart_spoon]

Isn't this just the gambler's fallacy? Yes, markets over a given period of time will likely conform to a particular distribution of performance, with some below-average periods and above-average periods that average out. But that does not mean that if there is an extended time period of terrible performance now, X years from there is likely to be a very strong rebound to compensate.

[iforgetti]

What you wrote is true about the performance of the underlying businesses but not necessarily true about an investment.

Stock performance (and any investment) is driven by both cost of purchase and underlying performance. Cost is driven by human psychology as much or more than business fundamentals.

As a result, poor stock performance is in some way an indicator of future improved investment performance because it corresponds with lower purchase price but as you note, deterioration of economic performance is absolutely not an indicator of improved future economic performance.