Thread by @sonusvarghese

This is the 10th bear market for the S&P 500 (price index) since 1950.

Few notes on the nine previous ones 👇

1/

1956-1957 Bear Market: -21.5%

Start: Aug 6 1956
Bottom: Oct 22 1957
Recovery: Sep 24 1958

- 15 months to bottom
- 11 months for recovery

Amid the "Eisenhower Recession" of 1957-'58 that lasted 8 months

2/

1961-1962 Bear Market: -28%

Start: Dec 13 1961
Bottom: Jun 26 1962
Recovery: Sep 3 1963

- 7 months to bottom
- 14 months for recovery

Amid Flash Crash of 1961-'62: The "Kennedy Slide".

Market came close to the bottom again during the Cuban Missile Crisis in Oct 1962.

3/

1966 Bear Market: -22.2%

Start: Feb 10 1966
Low: Oct 7 1966
Recovery: May 4 1967

- 8 months to bottom
- 7 months for recovery

Amid Financial Crisis/Credit Crunch of 1966

4/

1968-1970 Bear Market: -36.1%

Start: Dec 2 1968
Low: May 26 1970
Recovery: Mar 6 1972

- 18 months to bottom
- 22 months for recovery

Amid 1969-'70 Recession - a "mild one" that lasted 11 months

5/

1973-1974 Bear Market: -48.2%

Start: Jan 12 1973
Low: Oct 3 1974
Recovery: Jul 17 1980

- 21 months to bottom
- 70 months for recovery (ouch!)

Amid oil crisis of 1973, 1973-'75 recession that lasted 17 months, stagflation (high unemployment & high inflation)

6/

1980-1982 Bear Market: -27.1%

Start: Nov 21 1980
Low: Aug 12 1982
Recovery: Nov 3 1982

- 21 months to bottom
- 3 months for recovery 🚀

Amid Volcker tightening and 1981-'82 recession that lasted 18 months. Recession ended in 1982, as bear market recovered to prior peak.

7/

1987 Bear Market: -33.5%

Start: Aug 26 1987
Low: Dec 4 1987
Recovery: Jul 26 1989

- 3 months to bottom
- 20 months for recovery

Black Monday (Oct 19), but bottom was only in Dec.

Recovery surprisingly long but Fed made a series of rate hikes in 1988 to fight inflation.

8/

2000-2002 Bear Market: -49.1%

Start: Mar 27 2000
Low: Oct 9 2002
Recovery: May 30 2007

- 31 months to bottom
- 56 months for recovery

Amid dot-com crash, 2001 recession, 9/11.

9/

2007-2009 Bear Market: -56.8%

Start: Oct 10 2007
Low: Mar 9 2009
Recovery: Mar 28 2013

- 17 months to bottom
- 49 months for recovery

Amid housing bubble crash, Great Financial Crisis.

10/

2020 Bear Market: -26.7% so far

Start: Feb 20 2020
Low: ?
Recovery: ?

COVID-19.

11/

Drawdown math: worse the drawdown, larger the gain required to hit prior peak.

-20% -> +25% to recover
-25% -> +33%
-30% -> +43%
-35% -> +54%
-50% -> +100%
-60% -> +150%

In other words, deeper the drawdown, longer the recovery.

E.g. 1973-'74, 2000-'02, 2007-'09

12/

Since 1950:

Fastest crash: 1987 bear market (3 months)

Fastest recovery: 1980-1982 bear market (3 months)

6 out of 9 bear markets came amid recessions.

3 of the worst bear markets came amid deep recessions (1973-'74, 2000-'02, 2007-'09).

13/

Of course, bear markets do not go down in straight lines.

And we won't have any idea of the bottom until much later.

More on that here 👇, where I take a look at the last three bear markets.

https://twitter.com/sonusvarghese/status/1237902794776084480?s=20

End/