Money managers under the microscope
from Jeremy Gaunt:
Depending on how you look at it, August may not have been as bad a month for stocks as advertised. For the month as a whole, the MSCI all-country world stock index lost more than 7.5 percent. This was the worst performance since May last year, and the worst August since 1998.
But if you had bought in at the low on August 9, you would have gained healthy 8.5 percent or so.
In a similar vein, much is made of the fact that the S&P 500 index ended 2009 below the level it started 2000, in other words, took a loss in the decade.
That completely ignores, however, a more than doubling of the index between 2002 and 2007.
The Dow Jones Industrial Average has recouped more than 50 percent of the losses from the October 2007 peak and the March 2009 bottom.
It’s been a remarkable rally, and the cheerleaders of the world’s major economies say it indicates a return of confidence to markets.
from Global Investing:
Just how much have world stocks suffered in the past year or so? Try this. According to the World Federation of Exchanges, the market capitalisation of global stock markets has halved. It was $63 trillion in October 2007. At the end of January this year it was only $31 trillion.
It has all been more furious than most people can recall as well. When the internet-stock bubble burst at the beginning of this decade, MSCI's all-country world stock index lost around 51 percent of its value from peak to trough. In the latest drop, the index fell 58 percent from an all-time high in November 2007 to a new cycle low yesterday.