The market is so incredibly flat this year, strategist Tom Lee had to look back 111 years to find a comparable first half. And according to the Fundstrat Global Advisors co-founder, what happened in the second half of that year could be very instructive for today's investors.
"In the first two quarters, we had zero percent gains back to back. … Only one other time did we find the markets spending six months like today: back in 1904," Lee said in an interview Friday with CNBC's "Trading Nation."
After a pancake-like first half of 1904, "the market surged 41 percent in the second half. We are not saying 2015 is a repeat of 1904, but it goes to show, 'never short a dull market,'" Lee said.
Of course, historical comparisons can be tricky. And there's no getting around the fact that the economic and market environment was notably different back then.
For starters, there was no federal income tax, no national women's suffrage, and no S&P 500; the prevailing index was the which consisted of a small number of industrial companies. (It is possible to look at hypothetical long-ago S&P 500 performance, thanks to reconstructed numbers provided by S&P.)
Preceding the fateful 1904, the Dow fell 8.7 percent in 1901, 0.4 percent in 1902 and 23.6 percent 1903, "so there is a big difference between 2015 and 1904, since shares have been up, not beaten down, from 2012 to 2014," economic historian and NYU Stern School of Business professor Richard Sylla wrote to CNBC.
The trouble for stocks back then was actually a wave of mergers, which started off as supportive, before "as so often happens, the Wall Street bankers overdid a good thing."
By 1903, "the bankers were holding all sorts of newly merged company shares that they couldn't sell to investors," and the bankers "took a bath on the merged-company securities" even as the overall economy performed just fine.
For that reason, the 1903 market drop has been humorously referred to as the "rich man's panic," according to Sylla.
By the second half of 1904, a spate of railroad building sent steel, railroad and copper stocks higher, so the economy and the markets somewhat reconnected, as "a strongly improving economy after mid-1904 made shares that had been beaten down in the three previous years suddenly more attractive," Sylla wrote.
For his part, Lee doesn't dispute that we're living in a very different world than the investors of 1904, granting that "that's one of the drawbacks of looking at historical periods.".
Still, the generally bullish strategist says the lesson to avoid shorting a dull market is a timeless one—with 1904 serving as a prime example of what can happen to those who don't heed that well-worn advice.
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