Every stock bubble is different. Some pop with a bang; others...

Every stock bubble is different. Some pop with a bang; others deflate slowly. But one thing seems to be true for all of them: Repairing the damage takes time.

After the 1929 crash, it took the Dow Industrials about three years to bottom out, in 1932. Then it took 22 aditional years to get back to the 1929 high, which finally happened in 1954.

When the "Nifty Fifty" bubble popped in 1973, the industrials fell 45% in just under two years, and then it took eight years to return to their high.

The Japanese bear market that began at the end of the 1980`s took more than a decade to bottom out-- assuming it has donr so. Just as markets tend to go to extremes during booms, they tend to overshoot on the way down afterward.

This latest bubble in U.S. stocks was centred most heavily on the Nasdaq technology stocks, whose rout has been thorough. TheNasdaq composite is 73% off its record of 5048 on March 10,2000. The dow Industrials are a far smaller 28% below their peak, also hit in 2000.
The S&P 500 is 41% off its high.

So the Nasdaq drop is the big one. The Dow and S&P are not down as much as in the other recent bear markets. The S&P 500 was off 48% in 1973-1974. The Dow Intustrials fell 36% in 1987.

The variation is because not all stocks r suffering.
Those with dividends, those whose prices are low to their earnings and those related to real estate and construction have held up better than most.

The real pain, and real skepticism about the future, lies with the Nasdaq technology stocks. Few people expect any of the indexes to return to their old highs soon.

No factor is more powerful in today`s market than the crisis of confidence. Analysts say questions of trust not only have undercut investors` willingness to step in and buy stocks that look cheap, but also have sown skepticism about whether companies that seem to be on the mend can really be believed.