[xivzgrev]

This is an interesting analysis, but leaves out a big point: the structural evolution of markets over time

Back in 19th century, accounting standards weren’t as strict, information was not as widely available, and central banks didn’t exist. It was the Wild West so no wonder you had bubbles and long periods of draw downs

Today the US fed would quickly intervene to turn markets around. When Japan crashed in late 80s, they didn’t know QE was the answer so they struggled for a decade. When the US crashed for similar reasons in 2008, they knew QE would help and jumped on it. The stock market was back on track in a freaking year. It didn’t recover to the heights but it was trending on right direction.

To believe we would have similar long draw downs like the 19th century, you’d have to believe that something structural would change where current valuations would decrease: a shrinking economy (very unlikely), or capital flight elsewhere (also very unlikely given US track record).

The US economy has a lot of advantages and I’m having a hard time seeing a long term bear case for it

[trompetenaccoun]

The Japanese market crashed precisely because of excessive government intervention, not a lack thereof. It was heavily manipulated by Japan's own central bank, which worked well initially, but they were eventually pressured into liberalizing by the US and it went downhill from there. Sure, one could argue they should have doubled down and they probably could have kept it going for another decade or two. Eventually though these systems always collapse, planned economies do not work. Look into the term "window guidance" to learn more about what they were doing.

The US isn't doing anything on the scale Japan was doing but it's still less of a free market than it used to be. Keep in mind also that the US doesn't exist in empty space, the factories where American products are made are located in places like China and there are heavy financial links to this country that follows the exact strategy Japan had, with even more centralization and state ownership actually. This is also part of the US economy now, you can't just ignore that. It's a risk for the US economy, even some of the elites that heavily invested admit this now. Take Soros as a very late example.

[kccqzy]

Furthermore, the perception of the stock market has also evolved greatly since the 19th century. To first approximation, the more people believe in buy-and-hold, the more money gets invested, the more the stock market goes up. It's like a self-fulfilling prophecy.