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Forecast 2007: The Goldilocks Recession, John Mauldin
The Dow had topped out in late 1965 - early 1996, and then began an almost 30% bear market drop to the spring of 1970.
From that bottom the Dow took off. In January of 1973, the Dow topped out around 1050, or 5% above its previous high.
Thoughts From The Frontline, Forecast 2007: The Goldilocks Recession, John Mauldin 5/1 2007
"On January 1, 1973, Barron's published its famous Roundtable interviews with big-name professional investors. The title was 'Not a Bear Among Them.' (By the way, the Fed Funds Rate, as of the end of December 1972, was -- 5.33%! You can't make this stuff up.)"
Of course, the Dow then proceeded to drop 40%.
Economic forecasts this year tend to fall into three camps. The very large majority which sees a mild slowdown (not a recession!) with the Fed cutting rates in response and then renewed growth. They look back to the middle 90's where there was indeed a slowdown but not a recession, and the market continued to climb. Goldilocks, indeed.
There are a few which see the roots of a serious recession based upon a collapse in housing prices and a manufacturing slump.
And then there is the lonely middle where I reside, which sees a mild recession (at least by historical standards).
Why just a mild recession? Because basically the bulls are right about 70-80% of the economy. Things are doing just fine, thank you.