The Justa & Lars Honors Bob Brinker Investment Club Message Board

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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: marc ultra who wrote (12063)	2/24/2000 7:48:00 PM
From: marc ultra	Read Replies (2) of 15132

1976 bear and current possibilities. We know that there is a historic strong trend of outperformance from 11/1 to 5/1 with relative under performance from May 1 to Nov 1. I think this is an important consideration when thinking what a bear might look like given Bob called it in January. It is thus instructive to look at the run up to and course of the 1977 bear that the current market has been correlating to as Bob has mentioned multiple times forgetting about whatever fundamentals may have been involved since the correlation is not about fundamentals but about the topping process of a bull falling into a bear. I looked at some weekly Dow numbers from 1997 and 1998 to get some idea of what we could be looking at and to see in the case when a bear started in January how the usually seasonal factors mentioned above affected the situation. We can also throw in the mix the fact that Bob has clearly stated that he thinks this may take a long time to fully play out. Is some of that belief more than talking about a usual bear or has the 1977 model affected his thinking as well? Anyone interested can pull up the historical info from Yahoo but here is a sampling We peaked out on Dec. 1976 around 1004(figures not precise since I only looked at weekly numbers). After a couple of rallies and falls we entered the seasonal week part of the year at 936 on 5/2/77 By 5/23/97 we we had fallen to 898 6/20/77 bounced to 929 then went through a rather severe drop to 808 on 10/17/77 and finally bottomed at 748 on 2/27/78. The link should show the raw data. Obviously if different dates are put in the weekly numbers might look a little different. I think these might be the type of historical numbers Bob may be looking at and it shows the prolonged nature of a drop which if it occurs current investors are clearly not programmed to think about. I also am certain that if we get anything close to that 1977 scenario the NASDAQ will get hit and get hit big time. Also the 25% bear in 1977 is nothing the Fed will care to intervene in if the economy has not dramatically slowed chart.yahoo.com Marc

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