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Big Picture -- Reversion to the Mean

Started by pkamm, 01/22/2006 07:32PM
Posted 01/22/2006 07:32PM | Edited 01/22/2006 07:33PM Opening Post
Thought this would be fun for the new year, a fresh look at the 30+ year Nazdaq chart. Looks like the 'Decade of Deviations' starting in late 1995 and culminating in the bear market bottom of late 2002 has fairly clearly given way to a resumption on the chart of what appears its more historically "normal" slope which appears to approximate a 12.2% increase per year. It indeed appears that the market has reverted to the mean in this respect and that life has returned to 'normal'.

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pkamm's attachment for post 29306
Posted 01/22/2006 07:39PM #1
The S&P Midcap 400 shows a similar pattern on the 10-year chart, here resuming it's mean slope as well, demonstrating reasonably well that the phenomenon is not limited to the Nasdaq..

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pkamm's attachment for post 100167