Is this a correction or the start of a Bear market?
This is the question I am trying to answer. Obviously no one knows but the issue is critical to my investment strategy.
Someone correct me if I am wrong but I believe 73-74, 87-88 and possibly 92 were all considered Bear markets and the rest of the dips were all corrections. I keep asking myself whose self-interest is served by a Bear Market? I don't know anybody, not even shorts once we get down and trend sideways for months, who wins in a Bear. On the other hand, upward trending markets, with some good solid corrections seem good for everyone. The Investment Banks make money, brokers, individuals, the whole economy is better in upward trending markets - unless someone can point out where a solid Bear market has coincided with a healthy economy like we have now?
Therefore, I am leaning at this point, towards this being a good healthy correction and not the start of the Bear. Additionally, in this election year, if we go into a Bear market, Al Gore, has got a really tough time. Now for some of you/us, a recession would be a small price to pay to get rid of the Democrats. But that is not my issue. I am saying they are in currently in the White House and I think would do a lot to NOT see a Bear market/recession.
Finally, in the long run, I don't believe markets are manipulated. In the short run we have all seen what happens when Bill/Tony speak on genomics and patents, and Cohen/Greenspan speak on markets, etc. Without too much effort, this slide could be turned around quickly.
I realize that this overly simplified and that recessions may be required to clear out excesses in the economy. But the economy seems fine. It is just the markets that got ahead of themselves and we are in the process of cleaning that up.
I would appreciate your comments.
Marshall
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