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-   -   I vote to call it a Bear Market! (https://www.early-retirement.org/forums/f28/i-vote-to-call-it-a-bear-market-95345.html)

MRG 12-26-2018 07:07 PM

Quote:

Originally Posted by NW-Bound (Post 2163183)
A frog in a slowly heated pan?

Could be.

Perhaps a frog in a heated covered pot? Maybe not alive, nor dead? Who knows. [emoji111]

NW-Bound 12-26-2018 07:13 PM

Quote:

Originally Posted by Dtail (Post 2163208)
I think many folks would take a 15% gain over the next 13 months.;D

Yes. I would not complain. It's actually 19% from here, as I corrected myself earlier.

But to declare "victory" in just one day reversal of the decline? :nonono:

zedd 12-26-2018 07:17 PM

The market flash crash was unheard of ... until it finally happened.

What we have just experienced was an on a tear bear

Dtail 12-26-2018 07:18 PM

Quote:

Originally Posted by NW-Bound (Post 2163210)
Yes. I would not complain.

But to declare "victory" in just one day reversal of the decline? :nonono:

Absolutely, not a victory at all; just mostly short sellers covering I believe.

Winemaker 12-26-2018 07:30 PM

Quote:

Originally Posted by cbo111 (Post 2162298)
Maybe we should just acknowledge this was, in large part, caused by the "elephant" in the room?

Don't be an ass!;D

audreyh1 12-26-2018 07:47 PM

Quote:

Originally Posted by NW-Bound (Post 2163205)
Yes.

And it means that on the average, a bear market takes 13 months to recover to where it was.

Just because today the market jumps up 5%, one cannot say that the bear market is over.

Needs another 15% rise from here.

And that is 15% of the top market. As we are now lower, to get back to 2940.91 from where we are today at 2467.70, we need another 19.2%, not 15%.

It's similar to when we lose 50%, we need 100% increase to get back. Not just 50%, because a 50% rise from 50 cents gets us back to 75 cents, not a whole dollar.

That information is not quite correct. See the article.
Quote:

Since World War II, bear markets on average have fallen 30.4 percent and have lasted 13 months, according to analysis by Goldman Sachs and CNBC. When that milestone has been hit, it took stocks an average of 21.9 months to recover.
The bear market duration is the market dropping. It is measured from peak to trough - the time the market takes to go down. 13.2 months on average.

Followed by the period it takes to recover, which is usually longer. 21.9 months on average.

Add the two together, peak to new high recovered, you are talking 35.1 months, or almost 3 years on average.

NW-Bound 12-26-2018 08:12 PM

Thanks for the correction. I was so wrong in my post! I usually follow the link before making a comment, but was sloppy this time.

And so, instead of grinding out 13 months for a decline of 30.4%, we took less than 4 months to wipe out 20%. Of course, we do not know if the market will not turn around tomorrow, and then bounces around the bottom for another year, perhaps setting new low along the way.

And then, another 21.9 months to recover. Yikes!

Not so long ago, people called Bogle names for saying the market return will be not so hot for the next 10 years. Heck, we may be spending the next 3 years just to get back to where we were in September. And before you realize it, a decade has gone by.

Say hello to 4%/yr average return for the next decade.

PS. The above numbers are based on stock prices, I believe. Add to that the dividend, and the total return will get us back sooner.

But then, we have to figure in the inflation, which is roughly the same as the dividend. Oh well.

jcfradio 12-26-2018 09:55 PM

What is that sound that I hear???

Meow, thump, boing!:angel:whistling::whistling::whistling::whis tling:

Was today, a dead cat bounce? I did some tax loss selling today to have a bit more cash on the sidelines for buying opportunities.

corn18 12-27-2018 05:05 AM

Quote:

Originally Posted by jcfradio (Post 2163232)
What is that sound that I hear???

Meow, thump, boing!:angel:whistling::whistling::whistling::whis tling:

Was today, a dead cat bounce? I did some tax loss selling today to have a bit more cash on the sidelines for buying opportunities.

Futures seem to indicate the cat is still falling.

DrRoy 12-27-2018 05:45 AM

-19.8% on a closing basis. Close enough for me, but the semantics make no difference anyway, and 20% is arbitrary to begin with.

DEC-1982 12-27-2018 06:25 AM

On Dec 25, I did a calculation two ways:

1) using end of day numbers (2930.75). The S&P was -19.77 or -19.78%%
2) using intra-day highs (2940.91). The S&P was -20.05%
Low 2351.10

I was reading some articles yesterday, and while some report a bear, others (like from Bloomberg) don't. I thought end of day numbers were what were typically used, but perhaps it's not just numbers it's a "feeling" also. If the numbers are close enough, depending on who you are and how you think, you choose the numbers you like to buttress your position.

NW-Bound 12-27-2018 11:10 AM

Once more, I stand corrected.

The S&P high of 2940.91 I quoted earlier is intraday, not at closing as I thought.

One article I just read says "we have entered the bear market" and carefully adds "on an intraday basis". I guess in the old days there was no computer to keep track of the intraday highs and lows, and the tradition has been to use the closing values.

Well, all we need is a 1/10 of a point more. Should there be a poll to see if we are going to make this infamous milestone? :) According to historical records in the link in earlier posts, the night is still young with this market rout. We have another 9 or 10 months to get to the bottom yet.

Dtail 12-27-2018 01:39 PM

Quote:

Originally Posted by NW-Bound (Post 2163394)
Once more, I stand corrected.

The S&P high of 2940.91 I quoted earlier is intraday, not at closing as I thought.

One article I just read says "we have entered the bear market" and carefully adds "on an intraday basis". I guess in the old days there was no computer to keep track of the intraday highs and lows, and the tradition has been to use the closing values.

Well, all we need is a 1/10 of a point more. Should there be a poll to see if we are going to make this infamous milestone? :) According to historical records in the link in earlier posts, the night is still young with this market rout. We have another 9 or 10 months to get to the bottom yet.

Perhaps with the speed that this market has gone down, the bear bottom will be reached sooner.

El Magnifico Loco 12-27-2018 01:53 PM

Quote:

Originally Posted by audreyh1 (Post 2163215)
That information is not quite correct. See the article.

The bear market duration is the market dropping. It is measured from peak to trough - the time the market takes to go down. 13.2 months on average.

Followed by the period it takes to recover, which is usually longer. 21.9 months on average.

Add the two together, peak to new high recovered, you are talking 35.1 months, or almost 3 years on average.

Which I guess is why people say you should have 3 years worth of expenses stashed away as cash.

Re: where the bottom is, I think we should keep in mind the straight P/E is around 18 today and the CAPE is >25. I think we have further to go . . . .

audreyh1 12-27-2018 02:10 PM

Quote:

Originally Posted by El Magnifico Loco (Post 2163460)
Which I guess is why people say you should have 3 years worth of expenses stashed away as cash.

Re: where the bottom is, I think we should keep in mind the straight P/E is around 18 today and the CAPE is >25. I think we have further to go . . . .

It is conventional to talk about length of bear markets as the time period of the drop, but easily confusing and not clear that it does not include the time for recovery.

The drops and recovery periods from April 2000 and Oct 2007 were much longer than three years.

aja8888 12-27-2018 02:30 PM

The way I see it, is if you are counting on an equities "recovery" to fund your retirement future, you really need rethink your plan. Look what happened in Japan.

NW-Bound 12-27-2018 02:39 PM

Quote:

Originally Posted by Dtail (Post 2163454)
Perhaps with the speed that this market has gone down, the bear bottom will be reached sooner.

I think we all hope for that.

And then, we can all look back and say "See, it's only a correction. I told ya". ;D

El Magnifico Loco 12-27-2018 02:51 PM

Quote:

Originally Posted by audreyh1 (Post 2163464)
It is conventional to talk about length of bear markets as the time period of the drop, but easily confusing and not clear that it does not include the time for recovery.

The drops and recovery periods from April 2000 and Oct 2007 were much longer than three years.

Yes. As I recall, we did not truly recover from the 2000 bear until after we experienced the 2007 bear. But I think on average, from peak to peak, it's 3 years.

Another interesting question is whether we are still in a secular bull, or at the beginning of a secular bear.

audreyh1 12-27-2018 02:58 PM

Quote:

Originally Posted by El Magnifico Loco (Post 2163477)
Yes. As I recall, we did not truly recover from the 2000 bear until after we experienced the 2007 bear. But I think on average, from peak to peak, it's 3 years.

Another interesting question is whether we are still in a secular bull, or at the beginning of a secular bear.

Just looking at indexes, not counting dividends, the market had finally recovered in Oct 2007, just in time for the next bear!

But if you count in dividends, that shortens it. But when you take into account inflation, its drain is worse than the gains from dividends. They very roughly cancel each other out. Accounting for inflation and dividends the 2000 bear market never recovered and continued into the 2007 bear market, taking another 5 years or more to completely recover.

NW-Bound 12-27-2018 03:00 PM

Should I remind everyone why 2000-2010 was called "the Lost Decade"?

Don't you now wish you will get what Bogle suggested for the next 10 years' return?


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