New Bull Market

[Bikerdude]

Normally a new Bull Market does not begin until the old high has been eclipsed. This has happened for the Dow and is close for the S&P500. When do you think a new Bull Market has/will begin. Has it already begun? I think it will not begin until the S&P500 hits new highs and does not need the NASDAQ to confirm. What do you think?

 

[renferme]

Still afraid of another 2000 to 2002.
Not convinced that we're in or have been in a bull market since mid 2002.
.

 

[al_bundy]

looking at the history of the Dow it's periods of 15-20 years of a bull market followed by periods of 10-15 years of a flat market with a few bear markets in between.

so far we haven't had at least 10 years pass since the end of the last bull market

there was a russian economist named kondratieff who theorized about cycles of around 54 years of growth, inflation and deflation. his US research goes back to around 1720 and he's done some research on britain going back a little further. he used wholesale commodity prices and a few other pieces of data. right now according to his cycle we are close to being at the end of another cycle and should be in a deflation phase soon or just starting.

one interesting thing is that he said there is a regular occurence of wars due to these cycles. when i was getting out of the army in 2000 i turned down joining the reserves or national guard because i noticed that the US goes to war on average every 15 years. the latest war came 2 years early

he was killed in the 1930's so I don't know how much relevance his theory has in the post bretton woods accord monetary system

 

[Sam]

I care, but I don't know the answer. How do I vote?

 

[FinallyRetired]

FWIW, this is the Presidential cycle year in which markets traditionally rise. Of course, if too many people play that, it will evaporate.

 

[al_bundy]

even the sp500 made a small gain in 1987

 

[tryan]

stocks, schmocks ... how 'bout that housing bubble.

 

[Bikerdude]

looking at the history of the Dow it's periods of 15-20 years of a bull market followed by periods of 10-15 years of a flat market with a few bear markets in between.

I guess the reason I did the poll was that I have detected (since the 2000/2002 bear started) a general belief in the financial pundit community that we are in such a long term bear and that our current bull is only temporary. It would continually fall short of the the previous bull highs until a new (long term) bull begins by exceeding the old highs. A new high in the S&P500, to me, would confirm a new bull.

I just wanted to know what you thought. From the poll results most don't care.

 

[al_bundy]

i've read different opinions. some people say once you pass the old high, others say that once you get a rally on high volume off a low then a new bull market starts

 

[FinallyRetired]

Bull or Bear markets don't arise in a vaccum, they are driven by underlying economic factors and end with exscessive optimism or pessimism. The 1990s bull was driven by productivity increases, new technologies, and larger profit margins, and eventually led to the nasdaq crash. The minibear that followed was due to compressed profit margins and the 911 shock. The bull that seems to have emerged a couple of years ago is at least partly due to the low interest rates and the housing bubble. We are now on the cusp of something, and we won't know if it's a bull, bear, or nothing for another year or two.

Right now I can think of more cases for a bear than a bull but who knows. IMO, the housing market and the dollar need to regain stability before the market re-establishes a bull trend. But both housing and the dollar are tied to interest rates, which are in turn controlled by the market's perception of economic health and the Fed's perception of inflation. There are so many feedback loops that it's not possible to predict the outcome, which is a good reason for forgetting about it and being hedged to either outcome.

My own strategy is to keep enough cash for 10 years and let the remainder ride the market. 10 years is a lot of time, but not when you consider the 1966-82 flat market. I read some study that said the market's good gains come in relatively short spurts within long periods of low or negative returns. Nice thing about Firecalc or MC models is that they allow projections against long term markets.

 

[youbet]

our current bull is only temporary.

All the bull markets in history were only temporary. And I'll go out on a limb and say that the current and the next bull markets will be only temporary.

 

[Bikerdude]

All the bull markets in history were only temporary. And I'll go out on a limb and say that the current and the next bull markets will be only temporary.

Yeah, however, I prefer the 10 to 20 year temporary as opposed to the 2 to 3 year variety.

 

[Alex]

I voted 'don't care', and I really 'don't care'.

 

[bssc]

I think that bull markets are only determinable in hindsight. Of course, it could just be me.

 

[Milkman]

Does any of this really matter when the next bull market will hit?

My investment assets are up 60% since the market tanked in March of 2000. I did not panic, I had my assets allocated, and I kept adding money to my 401k and IRA accounts. Sure my assets took a beating for 18 months and took several more months to be on the positive side, but they came back.

I suspect most people on this board had similar experiences.

Milkman

 

[haha]

Does any of this really matter when the next bull market will hit?

Doesn't matter at all when the "next" bull market will hit- it would be hard to argue that it didn't hit in late 2002 and remains ongoing as we write. Margin debt is hitting new all-time highs almost daily, M&A activity is going strong- if this isn't a bull market, what is?

Now what might matter, at least to those of us who are retired, not on pensions, and not vastly overfunded is when does the next bear market start? This bull if reckoned from spring of 2003 is over 4 years old; if from fall 2002 older yet. While not absolutely over the top, this is well into "old bull" status.

Ha

 

[Gone4Good]

Now what might matter, at least to those of us who are retired, not on pensions, and not vastly overfunded is when does the next bear market start? This bull if reckoned from spring of 2003 is over 4 years old; if from fall 2002 older yet. Wile not absolutely over the top, this is well into "old bull" status

Absolutely. But there has been a pretty consistent trend over the past 80 years where economic growth cycles have grown longer and recessions have grown shorter, less frequent, and less severe. If I had to wager, I'd say we're only half-way through this particular bull run.

 

[haha]

I ran across this exerpt which addresses the original queston of "When will the next bull market start?", from Barton Biggs' book, Hedgehogging:

"How long it will be this time before stocks begin a true, new secular bull market is very difficult to guess. The conditions for such a renaissance are that money should be cheap and amply available, the debt structure should be deflated, there should be pent-up demand for goods and services, and, probably most important, stocks should be clearly cheap based on absolute valuation measures.
Today, money is cheap and available, but the other conditions are not in place. United States equities are far from cheap, but, considering the level of interest rates and inflation, they are not expensive, either. "

Ha