The 1978-79 Market Declines and Today: Deja Vu?

In this business many pundits attempt to “paint” the current pricing action in the various markets to that of past markets. An example would be comparing the Dow's post-2000 chart pattern with that of the Japanese stock market following its 1989 peak. Such comparisons tend to work until they don’t, which is why I rarely embrace analogues. That said, over the past 41 years I have observed a few comparisons that have had fairly good correlations to what was occurring at the time and have used them to help allay panic among investors at inappropriate times.