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Strategies & Market Trends : Sharck Soup
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To: DebtBomb who wrote (26306)6/6/2001 2:23:10 PM
From: stomper  Read Replies (1) of 37746
 
Jeremy Grantham says bull markets never fail to give back
every cent of their gains

By MICHAEL SANTOLI
interactive.wsj.com

So, when Grantham offers his group's 10-year returns forecast for various asset classes, it might be worth listening. What's more, his 1982 assertion -- quoted in the media -- that U.S. stocks were on the cusp of greatness marks him as a clear-thinking strategist, rather than a bear by habit or constitution.

He likes to show a gallery of charts of various bubbles -- defined as bull markets that ran to extremes that statisticians define as two standard deviations over the long-term trend -- and not one has failed to give back every cent of gains before it was done. He has challenged a collection of 2,400 investment professionals to pose a single exception to this rule and has found no takers.
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every single bull market that reached two standard deviations above it's long term-trend gave back every cent. you know what's the scary part? no major market has ever been three standard deviations above it's long term trend.....except one. in fact it did one better. the nasdaq heading into 2000 hit four standard deviations above it's 200 dma. the nasdaq also rose to approx 50% above it's 200 dma as well--never before in history had that happened.
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