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View Poll Results: What will be the duration of the current bear market?
3 to 12 months 14 31.82%
More than 12 Months but less than 18 14 31.82%
18 Months or More 16 36.36%
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How Much Longer Will the Current Bear Market Last?
Old 10-09-2008, 09:34 AM   #1
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How Much Longer Will the Current Bear Market Last?

Since 1956, the average bear market has lasted 14 months. The current bear market began on July 7, 2008. If this bear market turns out to be average, it won't be over until about September 2009. How long to you think the current Bear Market will last?

Past Bear Market Statistics



Sept '29-June '32 Duration 33 months, Decline 86.7%

July '33-Mar '35, Duration 20 Months, Decline 33.9%

March '37-March '38, Duration 12 Months, Decline 54.5%

Nov '38-April '42, Duration 41 Months, Decline 45.8%

May '46-March '48, Duration 22 Months, Decline 28.1%

Aug '56-Oct '57, Duration 14 Months, Decline 21.6%

Dec '61-June '62, Duration 6 Months, Decline 28%

Feb '66-Oct 66, Duration 8 Months, Decline 22.2%

Nov '68-May '70, Duration 18 Months, Decline 36.1%

Jan '73-Oct 74, Duration 21 Months, Decline 48.2%

Nov '80-Aug '82, Duration 21 Months, Decline 27.1%

Aug '87-Dec '87 Duration 4 Months, Decline 33.5%

July '90-Oct '90, Duration 3 Months, Decline 19.9%

Mar '00-Mar '03, Duration 35 Months, Decline 49.2%

July '08-

Edit: Typo
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Old 10-09-2008, 09:42 AM   #2
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18-24 months........
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Old 10-09-2008, 09:48 AM   #3
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If it is over in September, 2009, I promise you that I will be doing cartwheels all over this board!!!! I plan to retire in late 2009.

I don't really have a working crystal ball. However, I tend to be pretty pessimistic about this one. If we get back to where we were earlier this year in less than a decade, I will be surprised. And really, that is what matters more to me than when a strictly defined bear market ends.

On the other hand, I have been wrong before, many times!! I hope I am this time. It's just a guess.
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Old 10-09-2008, 10:10 AM   #4
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I thought the bear market started sometime around October-November 2007? Isn't that when the previous market high was reached?

If that is the case, then the end of the bear is right around the corner.
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Old 10-09-2008, 10:29 AM   #5
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I think the current bear started in October of 2007. The clock doesn't start when you are already 20% down! (Notice March of 2000 in your list? March of 2000 was the market peak, not 20% down from the peak!)

We are ALREADY 12 months into this one!

Personally, I think we have another 3 to 6 months to go.

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Old 10-09-2008, 10:36 AM   #6
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Quote:
Originally Posted by audreyh1 View Post
I think the current bear started in October of 2007. The clock doesn't start when you are already 20% down! (Notice March of 2000 in your list? March of 2000 was the market peak, not 20% down from the peak!)

We are ALREADY 12 months into this one!

Personally, I think we have another 3 to 6 months to go.

Audrey
This strange election is causing strange happening in the markets, on TOP of the problems we already have.......
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Old 10-09-2008, 10:39 AM   #7
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Quote:
Originally Posted by audreyh1 View Post
I think the current bear started in October of 2007. The clock doesn't start when you are already 20% down! (Notice March of 2000 in your list? March of 2000 was the market peak, not 20% down from the peak!)

We are ALREADY 12 months into this one!

Personally, I think we have another 3 to 6 months to go.
Audrey
We have been thinking alike on the market issues.

The market decline has been very steep. There might be a very quick turnaround - in Dec/Jan? I don't know why - except that markets tend to price in future expectations.
So in June/Sept of next year the market begins to price in the upturn and better earnings comparisons.
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Old 10-09-2008, 10:42 AM   #8
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The link below should answer questions about when the Bear Market began:

Investorazzi.com Blog Archive Jeremy Grantham: This Bear Market Has Claws
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Old 10-09-2008, 11:01 AM   #9
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Originally Posted by Retire Soon View Post
The link below should answer questions about when the Bear Market began:

Investorazzi.com Blog Archive Jeremy Grantham: This Bear Market Has Claws
Um - no it doesn't, unless you want to put the start at March 2000 like Jeremy Grantham does! He's going for a 10 year bear.

It's simple. The "duration counter" for bear markets start at market peaks. Last peak (Dow) - Oct 9 2007. Happy anniversary!

Audrey
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Old 10-09-2008, 11:51 AM   #10
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Originally Posted by audreyh1 View Post
Um - no it doesn't, unless you want to put the start at March 2000 like Jeremy Grantham does! He's going for a 10 year bear.

It's simple. The "duration counter" for bear markets start at market peaks. Last peak (Dow) - Oct 9 2007. Happy anniversary!

Audrey
Please read the second line of an article in Fox Business dated July 9, 2008:

"Financial stocks, especially Fannie Mae and Freddie Mac, led the way down on Wednesday as all three major indexes officially entered bear markets for the first time."

Dow Dives 236; Markets Fall into Bear Trap - FOXBusiness.com

The Smart Profits Reports Monday, July 14, 2008

"Last weeks volatile stock market action sent the S&P 500 into what economist officially call bear market territory, having fallen 20% from its 2007 high. It joins the Dow Industrials, Nasdaq Composite, NYSE Composite, and S&P 100 in "bear ground" and in making new lows for the year."

S&P 500 Becomes a Bear Market

WSJ Marketbeat, June 27, 2008

"With its most recent leg downward, the Dow Jones Industrial Average has declined more than 20% which is the guideline for defining a bear market this year..."

MarketBeat : Dow In Bear Market Territory

Edit: typo
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Old 10-09-2008, 11:58 AM   #11
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Originally Posted by Retire Soon View Post
The link below should answer questions about when the Bear Market began:

Investorazzi.com Blog Archive Jeremy Grantham: This Bear Market Has Claws
The OP was asking about a bear market - not a secular bear market that began in 2000.
Secular bear markets last from 15 - 21 years - avg. 18
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Old 10-09-2008, 12:05 PM   #12
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Retire Soon - You are confusing the date of the discovery of a bear market (down 20%) with the start of a bear market which is the date of the prior peak. We don't know we are in a bear market until we are down 20% from the all-time-high peak. The start of the bear market is then the date of the peak from which we are down at least 20%.

The most recent peak was 10/9/2007. We reached the 20% down in July of 2008.

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Old 10-09-2008, 12:06 PM   #13
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Retire Soon - You are confusing the discovery of a bear market (down 20%) with the start of a bear market which is the prior peak. We don't know we are in a bear market until we are down 20% from the all-time-high peak. The start of the bear market is measured from that peak.
You beat me to it...

All I know is that as long as every rally is met with a selloff and the market craps out in the last hour on a consistent basis, it ain't over...
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Old 10-09-2008, 12:07 PM   #14
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The the same metric needs to be used for all the dates or it is pointless.

Could you let use know if the past dates are based on the last market peak or when all three indexes go below 20%?

If you are using a new metric for the latest recession, then you simply will not be able to make a prediction from the past numbers. It doesn't matter what your sources are.

Edit: Audrey and Ziggy beat me to it in the last two minutes :/
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Old 10-09-2008, 12:09 PM   #15
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The the same metric needs to be used for all the dates or it is pointless.

Could you let use know if the past dates are based on the last market peak or when all three indexes go below 20%?
Since the previous bear is listed as starting at the market peak in March 2000 and not after it fell 20% from that position, I think we can say this one started in October 2007 for consistency.
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Old 10-09-2008, 12:17 PM   #16
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I am not really into semantics about the definition of bear markets, other than to say that bull advances are always defined from the prior major low, and bear declines from the prior major high. This remains true even if people on TV only start talking about Bear when it has declined 20%.

Anyway, unless this is is very different from prior post-war US bears, we should be about there by now.

Here is a very good chart:

http://dshort.com/docs/Bear-Markets-since-1950.pdf

Measured in S&P points lost, this shows that the current decline has bested all bears since 1950, other than '73-'74, and '00-'02.

Using the S&P as the metric, those two declines were almost but not quite 50%. A full 50% decline, not seen since the end of WW2, would put us at 788. Not pretty, but not too bad either. Most of us can well remember 2000-2002. Much of that very large loss was due to some unprecedented valuations of the New Economy delusion. 73-74 was quite similar. The Nifty 50 was the locus of overvaluation then, with lots of PEs of 50. The market came down hard in the late summer and fall of 1974, as these stocks which had been resisting the fall finally collapsed.

I think that overall valuations in October 2007 were higher than median, but not bizarre. I think the current bear is overdone. I think that there are real problems of capital mis-allocation now, as in those other two bears. But unless our dauntless leaders make huge blunders, we shuld be done very soon. And I think that in many sectors, there are amazing bargains to be had.

Ha
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Old 10-09-2008, 12:18 PM   #17
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Bear markets are always measured historically. From the date of the previous high point. That is one of the inherent problems that makes "bear markets" not a particularly useful indicator to investors. Ex ante, one doesn't know if we are in a bear market or if it is just a temporary "correction" on the run up. Ex post, the historical evidence makes it perfectly clear when the bear market started. But in this case, we didn't know the bear market started in October 2007 until a full 9 months later in July 2008. Without reviewing the record, I would assume many bear markets aren't known to be bear markets until we are half way through them.
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Old 10-09-2008, 12:20 PM   #18
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I think tha toverall valuations in October 2007 were higher thanmedian, but not bizarre. I think the current bear is overdone. I think that there are real problems of capital misallocation now, as in those other two bears. But unless our dauntless leaders make huge blunders, we shuld be done very soon. And I think that in many sectors, there are amazing bargains to be had.
I tend to agree. If we sell off as hard as '73-74 or '00-'02 in percentage terms, starting from relatively sane valuations compared to those peaks in 1973 and 2000, when the dust settles the market would look very cheap for those with a strong stomach and a willingness to wait years to be rewarded.
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Old 10-09-2008, 12:21 PM   #19
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what comes out of a bear first & fastest, housing or stocks? (my uneducated guess is housing comes out first but stocks go back up faster?)
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Old 10-09-2008, 12:23 PM   #20
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Without reviewing the record, I would assume many bear markets aren't known to be bear markets until we are half way through them.
See the chart in my link above. In at least one case the bear was over by the time the official 20% had been accomplished. And several more were close to being over.

ha
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