Wednesday, September 29, 2010

Steve Sjuggerud's DailyWealth

Steve Sjuggerud's DailyWealth: "ONE HECK OF A STOCK MARKET COMEBACK

Our chart today shows a whopper of a stock market comeback…

In late 2008, every stock index in the world was smashed at least 50%. And while the world has enjoyed a solid relief rally, stocks in large 'developed' countries like France, the U.S., and Japan are still well below their old 'boom time' highs. That's not the case in India, however… This market is in the midst of an incredible comeback.

India falls into our big 'Asia up, the West not so much' idea… the idea that developed countries with massive debt and social-entitlement overhangs will struggle compared with dynamic, less-developed economies that don't carry those heavy burdens. India, with its outstanding dependency ratio, is one such dynamic Asian economy.

You can see India's dynamics at work in the chart below. It's the past five years of trading in the 'Dow Industrials of India,' the BSE Sensex 30. As you can see, while 'developed' stock markets struggle below their highs, the Sensex has staged a huge rebound from a low of 8,400 to reach pre-crisis levels near 20,000. It's another angle on the big 'Asia up, the West not so much' story that will last for decades."

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