How does the US stock market follow a depression? What types of stock go up and what types of stock go down?
during a depression all the stocks go down. No stocks go up. The drop in stock prices would astound you. 1974 was not even a depression, just Jimmy Carter doing his thing. The average pe ratio was about 6. Do your math. During the 1930-39 depression stocks lost about 90% of their value at the peak of 1929.
Growth stocks would be hit the hardest. Their 30 to 40 pe ratios would drop to about 6 to 8. Add that to the drop in their profits of about 90% and you have the recipe for a really big fall in prices.
Maybe Cambell Soup would not drop over about 70% or so in price. It would be one of the more stable stocks.
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