The "Last Bear Standing": It's December 1974 All Over Again
Posted Aug 07, 2009 10:15am EDT by Peter Gorenstein
The bulls are clearly in charge. The Dow Jones Industrial is above 9,300; the S&P 500 is straddling 1,000; and the Nasdaq is flirting with 2,000. Stocks say a recovery is underway.
But, wouldn't you know it, Tech Ticker recently chatted with the self admitted, "last bear standing." John Mauldin, president of Millennium Wave Investments, isn't convinced the next bull market has already begun. The market is "getting way ahead of its fundamentals," Mauldin tells Henry.
Not until companies start adding jobs - and, he's not predicting that to happen this year - will he be confident about stocks. (Though today's jobs data is a step in the right direction.) Experts, in his view, misunderstand the economic situation. "This recession is completely different: it's a deleveraging recession," he says. "It's an end of a business cycle, it's an end of a super debt cycle recession and that's a completely different animal.”
While investors continue to buy the rally, Mauldin is content to wait for a correction. He likens today's situation to that of the bear market of the 1970s. "December 1974 to 1982 was a very, very tough period. What we got was compressing price-to-earnings ratios. And that's what I think we're going to see."
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