Tuncia,
I will if I want! <petulantly>
In truth though, I think you are correct to write 'please don't call it a bear market.' Of the major indexes, the Naz is the only in 'bear' territory (off more than 20%). Optical_P. wrote that hindsight will determine the matter and, to a great extent, I agree. That having been written, though, I am of the firm opinion (right or wrong) that we are likely headed to a place where history will judge this this period a bear market. Until then, it is only a putative bear in my mind.
As for the conditions, my reading of the history of markets is that bear sometimes begin with clearly running inflation and falling corporate profits. However, it is simply wrong to say they all do. Most bull market tops begin while corporate profits are still rising. Many tops are accompanied by only wiffs of future inflation after periods of extended business expansion. In fact, these conditions are part of the reason why it is so hard for people to see the top as a "top." 'With everybody working and corporate profits at record levels year after year, how could this possibly lead to a bear market?' That's just it. It can. Ironic, eh?
In order for me to be convinced to stop writing "putative bear market" I have to think the general economic conditions are such that the Fed will begin another period of expansion and that inflation is on the wane instead of waxing.
Just my 2c.
Ciao,
David Todtman |
