Japanese stocks compounded at roughly 17% a year through the 1970s and nearly 29% a year through the 1980s — turning $10,000 in 1970 into about $610,000 by 1989. The bubble then burst so completely that the Nikkei 225 didn’t reclaim its December 1989 peak until February 2024, a 35-year round trip.

The first great stock bubble burst three centuries ago. In 1720 shares of Britain’s South Sea Company shot from around £100 to nearly £1,000 in a matter of months, then collapsed back toward £100 by year-end — ruining thousands of investors.

The only four-year losing streak in Dow history is the Great Depression: the index fell 17% in 1929, 34% in 1930, 53% in 1931, and 23% in 1932. 1931 remains the worst calendar year the Dow has ever recorded.

Warren Buffett is one of the greatest investors of all time — and for a moment he looked completely out of step. In the 20 months leading into the March 2000 dot-com peak, Berkshire Hathaway’s stock fell about 45% while the Nasdaq 100 nearly tripled. Buffett was right in the end; it just took longer than the market’s patience.