Whenever we are confronted with a bear market, we all want to figure out how it will play out. We want to know how big the decline will be. We want to know when it will end. We want to know what stocks we should buy to limit losses during it and to outperform the market after it. To answer these questions, our minds tend to point us to the simplest solution we can find. That solution is often to find the bear market in history that was most comparable to this one, and to assume that what happened then will also happen now. But there is a major flaw in that argument: no two bear markets are alike.

In this week's episode, we discuss the dangers of trying to compare the current bear market to past declines, and compare and contrast some historical bear markets with what is going on now.

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Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.

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The Limits to Lessons From Past Bear Markets

Excess Returns