Tech Stock Valuation

RETURN REVERSAL IN THE S&P 500 AND THE NASDAQ 111

that averaged 17.4%. However, it is important to note that these worst 10 bear

market periods are not fully independent. This makes consideration of larger

samples of poorly performing markets interesting. In this vein, it is interesting to

note that returns for the worst 30 bear market periods, where negative historical

12-month returns of −21.8% for the S&P 500, are followed by above-normal

returns in the following year of 13.6%. For the worst 10% (or 60) bear market

environments for the S&P 500, large negative market returns of −17.5% are

followed by above-normal market returns of 14.2% in the subsequent ...