History Doesn't Repeat...

History doesn't repeat... but it often rhymes. (Mark Twain)

Here is a chart comparing the Dow Index from 1920-38, and the Nasdaq Index from 1994-present. The resemblence is striking! Assuming this is not due to chance, I attribute the resemblence to never changing human nature, the extraordinary popular delusion and the madness of crowds, the psychology of investors that drives bubbles to inflate and then pop. Over and over again.

Next week I'll roll the clock forward 6 years on the Dow Index to show how that story unfolded, to examine a possible scenario for how today's market may unfold over the next few years.