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Old 01-15-2008, 12:11 PM   #21
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Originally Posted by Gearhead Jim View Post
As someone pointed out, market timers need to be correct twice: when to get out and when to get back in. Miss either one and you could be worse off than buy and hold.
And most are way wrong.......buy and holders smoke about 99.99% of all market timers..........
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Old 01-15-2008, 12:13 PM   #22
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Originally Posted by Maurice View Post
To believe in a 'secular' bear market is to believe that economic growth will stop and reverse itself, not just for a quarter or two, but in an 'ongoing' way, 'through the ages' as it were.
It is more a reflection of psychology, thus the change in p/e ratios. In bull markets, people jump on the bandwagon expecting more growth than will occur and bid up assets, driving down future returns, while in bear markets they shun risk and avoid equities which become bargains with higher future returns. Economic growth, while variable, is more uniform over time. When people express concern over reaching new highs seven years later, it is pretty much an indication of this. We should reach new highs every year simply due to inflation. Still, I don't see anyway of predicting changes in psychology.
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Old 01-15-2008, 12:29 PM   #23
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Originally Posted by aenlighten View Post
It is more a reflection of psychology, thus the change in p/e ratios. In bull markets, people jump on the bandwagon expecting more growth than will occur and bid up assets, driving down future returns, while in bear markets they shun risk and avoid equities which become bargains with higher future returns. Economic growth, while variable, is more uniform over time. When people express concern over reaching new highs seven years later, it is pretty much an indication of this. We should reach new highs every year simply due to inflation. Still, I don't see anyway of predicting changes in psychology.
Greed and fear still rule investors, and their behavior reflects it. The best place to be in 2000 was short-term Treasuries, but how many investors do you think sold their CMGI and bought them I know, everyone's brilliant in hindsight..........
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Old 01-16-2008, 09:21 AM   #24
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I got a question for all of you statistical analysis geniuses. I have a friend who describes himself as a permabear. He has been very bearish since 2004 (and lost a lot of money accordingly), but now he is absolutely certain that we entered a "secular bear market" in 2000 and that the 2003-2007 period was just a hickup in a long term down trend. Now I understand what a bear market is, but how exactly does one define a "secular" bear market? How long does a bear market have to be before it technically becomes secular? I have heard people say 10-15 years... And since the 1920's have we ever experienced one? In the late 60's and in the 70's we had somewhat of a sideway market but could that be qualified as a secular bear market?

Thanks for your answers.
check the Dow charts going back to the 1800's. there are numerous cycles of 15-20 years of a bull followed by a flat or bear market. 1929 - 1950, 1968 - 1982 are two examples where the Dow took something like 20 years to break the old high.

SP500 is more broad and doesn't really follow the same pattern. in the last bear market it's was more like a W
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