It only goes back to about '85. In that time we have had but two bear markets. And if you look at the duration of those compared with other historical bears, you will see they were both very short lived, in comparison. http://www.bearmarketcentral.com/images/duration.gif In fact, they are the two shortest ones since 1900 lasting less than half a year. Presently, the bear market in the NAZ is about 10 months so far.
What I am looking at is how long it takes the market to regain their precious highs and move higher. I don't have the stats in fornt of me, but I believe it took 25 years for the '29 bear to get beyobnd it's previous set highs. the Bear of 73-74 took what about eight or 10?
Sure, maybe it's different this time. But the fact still remains that the COMP is still way over valued as a whole and until that comes back in line some what, we ain't going much higher. E has to catch up to P or P is going to cathc up with E.
I also agree with you that people cause recessions. They are the ones buying stocks with PEs over 100 on forward earnings and every other trick that is used to value the "new economy". They were doing this inspite of rising rates, so in reality, I think it is an inmature argument when I hear people blaming the Fed for our current conditions. It wasn't a very popular comment don't fight the fed back when he first strarted raising them.
Now, IMO we are in a real bind. And I do not think that rate cuts are the solution. The soultion is and always be responsible spending! Unfortunately, this is going to be a very hard pill to swallow.
I do have stocks in a longer term account. But i am planning on paying capitol gains on them. Am I of the "buy and hold" school right now? No way. People can do the buy and hold approach if they want, but i believe that for the most part, it's dead money at best for the next five to 10 years. When will Cisco reach 80 again? Next year? five years? Maybe 10 years? Maybe 20!!! How about the other stocks. Will they even be around in ten years?
I agree with your long-term perspective---though I also, like you, look at the short and medium term. Guess we're on the same page. But the first thing that came to mind when I saw your linked chart was:
If ever there were a time to start planning a long-term B&H portfolio, this is it. This is the cheapest most good stocks have been in a long time.
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