RE: "...reasons for a secular bear, are a combination of overvaluation, time required for equilibrium to reestablished (including rebuilding balance sheet by both corporations and consumers) and elimination of the excess in capacity by a gradually increasing demand and the simultaneous gradual closing of less efficient capacity... This will take a long time to accomplish."
I wonder about your "timing". You emphasize "gradual" and "a long time", but that seems anything but obvious and possibly somewhat counterintuitive. The keys to the bubble, technology and the market, are not areas that typically move slowly. Certainly, the technology market has fallen very rapidly. Overcapacity, in technology, is eliminated by your "increasing demand" and "closing of less efficient capacity', but more importantly by obsoleting capacity and creating demand for new, more advanced capacity. The whole industry knows that they must innovate out of this situation. I don't see a 16 year "secular bear" remotely corresponding to the pace of change in the technology market place. When technology turns the corner, it will drive the rest of the economy. I have been on record since early 2001 with a forecast of 2007-8 as the top of the semi-equip up cycle which started in 2002. That is a very long cycle and it reflects the influence of the bubble. The "secular bear" will last until the NAZ gets back to 5000, but most of the time until then the market will be moving up. IMO (IMNSTO) |
