A Bear Market For The Next 15-20 Years?

[HFWR]

I "joke" about the four billion or so potential consumers, particularly in much of Asia, Africa, and South America, and the primary (IMHO) thing holding that growth back is political. Hard to have a growing, vibrant economy with no property rights, no legal system, and no infrastructure, not to mention wars between corrupt governments, and equally corrupt "rebel groups".

Certainly, mobile communications technology allows a phone/web system to be built without planting gazillions of poles and running brazillions of miles of cable, like in olden times. Other infrastructure, such as power generation, or water purification, can be made functional on a local basis with solar or other technologies, assuming the socio-political environment is stable enough. And micro loans, crowd sourcing, and other "innovative" financing techniques are enabling the entrepreneurs doing these types of things.

Still, having a working highway, rail, air, and port system, where applicable, would be necessary for more regional development, but baby steps...

I haven't studied any of this in-depth, though I have seen anecdotal evidence mentioned in various media from time to time.

 

[YVRRocketSurgery]

I sure hope so too.

But I'm not sure exactly where the gains for the next 15-20 years are supposed to come from. Domestic large-cap earnings multiples are in the top quartile of their historic average. And corporate profits are right near a record high as a share of GDP.

Normally one would expect stock multiples to be depressed after a "secular bear market." That allows multiple expansion to provide some extra juice to a secular profit recovery. Neither driver (either earnings growth or multiple expansion) seems very likely from where we are right now.

Maybe we're on the cusp of a great technological revolution - A.I., robots, bio-engineering, nano-tech, some kind of actual pay off from big data or streaming cat videos, etc - that will cause earnings to surge ever higher for the next two decades. I surely hope so. Unfortunately historic stock charts probably don't offer any real guidance on the likelihood of those things.

[Late to the thread and reading my way thru it...]

I agree and also have concerns where the growth will come from. I've recently read articles about demographics and aging populations causing issues.

From a technological revolution perspective, I've been reading a lot of the growth of Internet of Things, the corresponding big data collected, and the corresponding analytics that will make so many things more efficient. While IoT is creeping into our lives with Internet connected home appliances, the real gains will be by businesses and machine to machine connections. We're apparently at the cusp of this "revolution" with things targeted to really getting going by the turn of the decade.

 

[YVRRocketSurgery]

As to the original question, I'm not totally convinced we're out of the secular bear market yet. Hope we are though because I'm still next to fully invested.
What worries me is that things (ie. Interest Rates) aren't "normal" yet and personally, a persistant feel of waiting for the next black swan event to happen vs being able to shrug off the disappointments.