BEAT THE COUCH · THE ARCHIVE · STAGFLATION

Could You Have Beaten Stagflation?

THE WINDOW: JAN 3, 1977 TO DEC 29, 1978 · 504 TRADING DAYS

Inflation, a falling dollar and a market that went nowhere. From January 1977 the couch ended at $9,908 while cash earned +12.8%. 54.9% of 1,550 players beat it.

What the couch did

What happened

January 1977. Inflation will not die, the dollar keeps sliding, and the stock market has gone nowhere for ten years. Every rally fades. The magazine covers ask whether stocks are finished.

The couch buys and holds and, for once, gets nothing for it: $9,908 two years later, -0.9%, including a 14% drawdown. Meanwhile plain T-bills paid +12.8%. In October 1978 the market had a sharp sell-off, and on November 1, 1978 the White House announced a plan to rescue the dollar and stocks jumped in a day.

This is the window that made a generation of investors believe buy-and-hold was dead. It was not. It was resting.

What the players did

Player figures cover every game whose window started in 1977, not only the exact hand above, and come from the run export of October 31, 2026. A win counts as SKILL only if it beats 90% of 1,000 monkeys replaying the same window with the same trade count and the same time in the market. Across the thirty windows in this archive players beat the couch 39.2% of the time, because these are the famous years. Across the whole ledger the couch wins 62% of 120,800 games.

The read

54.9% of 1,550 players beat the couch, and 16.8% passed the monkey audit, among the higher skill rates in the archive. When cash pays double digits and stocks go sideways, sitting out is not a mistake, it is a yield. The timers here were not reading the market. They were being paid to wait.

Frequently asked

How did stocks do during stagflation in the late 1970s?

Badly in real terms. A couch that bought on Jan 3, 1977 ended two years later with $9,908 (-0.9%), while 3-month T-bills earned +12.8%.

Did market timing work in the 1970s?

In some windows. In windows starting in 1977, 54.9% of players beat buy-and-hold, helped by high cash yields.

Method: real S&P 500 daily total returns, dividends included, calibrated to Damodaran's annual series; cash earns 3-month T-bills. The same data the game deals. See the evidence page for sources, and the full ledger for the whole ledger.

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Not financial advice. The couch is not licensed for anything.