The strange connection between spaceflight and bear markets

This is not investment advice. The author has no position in any of the stocks mentioned. has a disclosure and ethics policy.

“Bull parties end when the dream is priced in. What do you do when there’s nothing left to do? Sell.”

These are the words of Jawad S. Mian, author of Sharada Reflections. With a tough year — for markets, at least — coming to a close in a matter of hours, it’s only natural for one to sink into an introspective mood. One such reflection concerns the strange relationship between the space race and the end of stock market bull races.

Back in July 2021, when one of the longest bull markets in history was still alive, Jawad S. Mian wrote an interesting article exploring the relationship between intense spaceflight and the health of financial markets. Of course, some might say that correlation does not imply causation, which is true. Nowhere does Mian conclude that spaceflight somehow affects the underlying market dynamics. Instead, spaceflight raking in a lot of hype is usually a symptom of the underlying euphoria in society at large, with bull markets merely representing this euphoric impulse. Let’s dig deeper.

Russian cosmonaut, Yuri Gagarin, became the first person ever to travel to space at 12The tenth In April 1961. In the lead-up to this historic space flight, inventories skyrocketed. In fact, the S&P 500 had a cyclical peak in 1962 and then fell 30 percent in 1962. Likewise, the market crashed by more than 30 percent over the 18-month period after the announcement of the Apollo 11 crew in 09The tenth January 1969.

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Nearing the end of the century, American businessman Dennis Tito spent $20 million in the early 2000s to become the first private citizen to enter space. By the time of his actual space flight on the 28thThe tenth In April 2001, the dot-com bubble burst, leading to a 60 percent drop in the Nasdaq 100. On a similar note, gaming czar Richard Jarriott announced his plans to spend about 12 days aboard the International Space Station (ISS) on the 28th.The tenth September 2007. Naturally, the subprime mortgage crisis began to abate just a week after this announcement. Garriott flew into orbit on the 12thThe tenth In October 2008, a few days before Lehman exploded.

This brings us to the end of the last major uptrend. Readers will remember that the high-stakes space race was all the rage in 2021 as Jeff Bezos of Blue Origin and Richard Branson of Virgin Galactic vied to become the first billionaires to enter space. Virgin Galactic completed its fourth rocket-powered spaceflight and first fully crewed flight in July 2021, carrying Branson into space. However, the Blue Origin confirmed that Branson did not actually enter space because the spaceflight did not cross the Kerman Line – a theoretical limit at 100 kilometers above sea level. Of course, Bezos’ own foray into space happened just a few days later. As expected, the S&P 500 peaked at 31street December 2021. So far in 2022, the index is down more than 20 percent.

Do you think intense spaceflight could be an accurate measure of the froth on the market? Let us know your thoughts in the comments section below.

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