Two Year Anniversary of Market Low Call

Two years ago on March 12, 2009 I publicly called the March 9, 2009 U.S. financial market low.  I have wanted to update the performance of the financial markets over that two year period.  However, with the crises of the Middle East and Japan running rampant it seemed crass to publish such a post.

In that post, entitled “Bottomed Out?,” I said:

“So does this rally indicate that we have reached a bottom?…If you have courage as I do that we are at or very near the bottom then you can do as I am doing: buy equities…I am not confident that the bottom has been definitively reached, yet but am buying anyway. The lows are just too low and bargains in sound businesses abound.”

How would you have done if you had followed my advice that day?  Here I am assuming that you would have bought at the opening price on Friday, March 13, 2009.

Dow Jones Industrial Average…

March 13, 2009 open: 7,219.20

March 11, 2011 close: 12,044.4

Gain: 66.8%

Standard & Poors 500 Index…

March 13, 2009 open: 751.97

March 11, 2011 close: 1,304.28

Gain: 73.4%

NASDAQ Composite…

March 13, 2009 open: 1,427.03

March 11, 2011 close: 2,715.61

Gain: 90.3%

The big question should be: what gave me confidence in the midst of the worst financial meltdown since 1929 that the market had bottomed?  The full answer is something I describe at length in The Intuitive Investor: A Radical Guide for Manifesting Wealth, but the short answer is that I used my intuition to tune into the mood of the market.  I felt that investors were no longer nauseous, but exhausted, by the collapse of gross domestic product (GDP) around the world.  That state of exhaustion meant that further bad news would not be responded to with the “purge NOW” mentality of the preceding year’s worth of trading.

Jason