Knicks Winning is a Horrible Omen for Stocks 🎧 #689 (Jun 14)

Before Saturday, the last times the Knicks won the NBA Championship were before I was born, 1970 and 1973.

Between 1969 and 1974, the U.S. stock market went through a highly volatile, grueling period that ultimately culminated in one of the worst market crashes and bear markets in history. Let’s go Knicks!

The Slump and Early Recovery (1969–1972)

• 1969–1970: The period started on a weak note. Rising inflation, driven by spending on the Vietnam War and domestic programs, prompted the Federal Reserve to raise interest rates. This triggered a recession and a minor bear market. The S&P 500 fell roughly 11% in 1969, and stayed flat in 1970.

• 1971–1972: The market experienced a strong rebound. Investors piled heavily into a group of 50 popular, fast-growing large-cap stocks known as the “Nifty Fifty” (including companies like Disney, Xerox, and IBM). Because everyone thought these stocks were “bulletproof,” their valuations soared to incredibly risky heights. The S&P 500 jumped over 15% in 1972.

2. The Great Crash (1973–1974)

By January 1973, the market peaked and the bubble burst. What followed was a brutal, 694-day bear market.

• The S&P 500 annual returns tell the story: * 1973: -17.37%

• Overall, the Dow Jones Industrial Average lost over 45% of its value, while the broader S&P 500 plunged more than 40%. It wiped out roughly $525 billion in investor wealth, making it the worst economic downturn for stocks since the Great Depression of the 1930s.

• The “Nifty Fifty” Collapse: As the economy cratered, institutional investors realized the “Nifty Fifty” stocks were wildly overvalued. These glamour stocks completely collapsed, dragging the entire market down with them.

• Political Instability: The ongoing Watergate scandal and the eventual resignation of President Richard Nixon in August 1974 severely damaged consumer and investor confidence.

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Daily Stock Markets covered in under 15 min. No ads. No partisan politics! Easy to follow for your morning coffee, dog walk or commute

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