Ander:
As to finding things to buy, SHORTS, of course! Right now, I am 72% cash and I would like to get to AT LEAST 75% and maybe 80%. I also want to have a 10% short on a double beta RYDEX short fund. That would essentially make me market neutral, but still with some stocks that I can play with. My only comment about not being IN the market, when it is destined to collapse, is predicated upon having an inordinately LONG position. There is nothing wrong with a long position if you hedge it with a short position IMO.
I would only refer back to the last secular bear cycle. The reason is because I don't trust the market history before the 1950's as having relevance today. The only exception would be the UNBELIEVABLE speculation in the late 1920's that is comparable with the late 1990's. The last secular bear cycle was from 1966 to 1981. So, IF we are in a secular bear cycle, then we aren't talking about 5 years, but certainly longer as you pointed out.
The last secular bear cycle had 4 cyclical bull cycles within it. They ranged from 21 months to 38 months. We ended this one (if we did) on month #29 (March - right in the middle of this range).
They ranged, in terms of gains, from +32% to +76%. At the peak in March, the DOW was +54%. This too is exactly in the middle of the 4 cyclical bull cycles.
What makes me more paranoid than just the fact that it is in the middle of the previous cycles in terms of length and return, is that most other indexes are up considerably more than the DOW (which is what the previous secular bear cycle was using as a yardstick). Therefore, the REAL markets are up considerably more than the +54%. Consequently, it is already close to the top end of the other 4 cyclical bull markets.
As I said to what's his face, why push the envelope at this point? Unless one wasn't in the market in October of 2002, you have made great money. It is time to NOT try to squeeze a few more percent out of it. Take your profits and wait for the inevitable collapse and the next Brinker call of a bottom (though he hasn't called the top yet).
The 4 cyclical bull markets obviously are sandwiched by 5 cyclical bear markets within the 15 year secular bear market. They averaged 16.4 months long - considerably shorter in duration than the cyclical bulls. The reason is that it doesn't take nearly so long to get to the bottom as it does the top.
I have said that I think Brinker has missed his call in early March. The reason is because if you are waiting for a blow-off top to call it, you won't make the call. Tops don't act like that for indexes - only stocks. BUT, they do have blow off bottoms for indexes. Therefore, it was "easier" to make the bottom call on March 11, 2003, then to make the top call on March 7th (or so) of 2005. Still, I'm waiting for him to make his call before I take a double beta short in the RYDEX fund on 10% of my money.
Len
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