This post is mainly addressed to the large number of perma bears, who have justrecently come out of hibernation! Welcome back guys, but be careful, becausethe glory days of 2008 might not last as long this time!
Majority of the time on this blog I tend to do updates from the short to mediumterm perspective (
Quick Market Update)
as I follow the markets movements andfluctuations. After all, the blog is used as my own investment dairy and writingthoughts to paper helps one try and understand the huge volumes of data andnews all of us are hit with on a day to day basis. With all that noise in thebackground, sometimes it is very easy to lose the long term picture, which in myopinion is far more important.For those that did not see the last long term update, pleaseclick here.Theupdate warned on a potential turn coming up, where a cyclical bull couldpotentially end. Even though admittedly I was not extremely bearish, I wroteback then that:
Since the cyclical bull market began on 09th of March 2009, ithas lasted over 121 weeks and so far has gained 87.5%. As youmay remember, the gain was over 100% at one point beforethe May and June correction started. While an averagecyclical bull market tends to last 155 weeks with an average gain of 100%, the cyclical bull markets within a secular bear market tend to last only 126 weeks with gains of about 100% plus. So therefore by all definitions, we have achieved thataverage.Note: The historical data in the bar chart above is complied since 1929 for theS&P 500.
Majority of the global equity sectors and indices fell below 20% during the lastweek of trading, indicating that we are pretty much in a new cyclical bearmarket, even if it only ends up being a short lived panic crash like in 1962, 1987and 1998 (yes I do read a lot of history).