Dow 1932 Market Bottom, Parabola, What Can Be LearnParabola exists in almost everything. The boom and bust cycle always exist even things that is not related to economics.
So, it is important to understand the existences of Parabola and how to make money from Parabola.
Looking through data of hundred of stocks and assets for the past hundred years indicate the presence of Parabola or Parabolic Move.
For example, Dow first Major Parabola peaked in 1929, that's since the inception of Dow.
And by default, the assumption is always that after the parabola, then crash, then a formation of a BIGGER parabola in the future.
That has always been the assumption since the world population is growing and economy will EVENTUALLY recover and grow.
Plus, the whole financial system is DESIGNED to be INFLATIONARY and so money purchasing power declined over time. That is another reasons why stock market is going up over the long run, sometimes in Parabolic fashion.
Why do many people miss out in a bull market? Because they make the wrong ASSUMPTIONS about market. The first major assumption is that stock market has always been going up over the long run. Because that's how money works, how capital works. Just ask yourself question, where do smart money put their money? In something. And whatever the thing smart money is putting on is what going up.
During the Great Depression of the 1930's. dow rallied 400% from 1932 bottom to 1937 top, and then forming another 50% correction before grinding higher and higher and higher.
This is one of the characteristics of EARLY PARABOLIC FORMATION, it has always been slow and very volatile. The market is very INDECISIVE and people always often sell the rally and go back to cash.
It continue like this until eventually the Parabola is ready for its major move, which begins in 1950 for Dow Jones, then it will move much faster.
However, this parabola is a bit weak and didn't throw away all its forces, peaking in 1966 and then stay sideway for another 14 years until 1980 while commodities and Gold are making its own parabolic move. which indicates a shift in capital and capital flow into something else during that time.
That obviously can happen, but yet again, due to the sideway market of the 70's, most people miss out on the 1980-2000 bull market and parabolic move, because yet again, by default, people always assume that market will crash and we will go back to great depression.
Parabola works until it doesn't, and it is much better for the whole market to go up over the long term, because if the market crashes, then it will be great depression and not the time you want to live.
Parabola is the only way to make a lot of money and to become rich, and has been demonstrated by all the big gains in innovation and disruption.
Tesla is latest example of Parabola. It is not that hard to make money in Parabola, buy the dips and follow the trend until it is over or reach its blow off/melt up phase. Which means either going long or holding cash. But most people insist on doing short term trading to make a lot of money.
I wish people can be more long term minded and see the obvious thing, but not, people are too short sighted.
This current parabola in the US stock market will be missed by many people and many people will miss out on the big gains by disruptive and innovative companies, just as they missed out on all the 100 baggers or more for the past 100 years.
