>> I focusing more longer term. <<
I hope your definition of long-term is 15 years.
>> Btw, i think the Bear is dead! <<
Bear markets that decline more than 50% in only one year to only two year lows rarely come back in quick fashion. I'm not saying it's impossible, most examples are found in tiny emerging markets much smaller in size and scope than the bubble we just experienced.
The Hang Seng peaked at 16,673 on August 07, 1997 and then dropped 60% in exactly one year to 6660 on August 13, 1998. It mounted a staggering rally to marginal new highs at 18,301 on March 28, 2000, about a 175% gain off the bottom in about 19 months. Of course we in America have to do everything bigger and better so we mounted a staggering rally of about 258% in about 17 months off our lows of Oct 1998.
BUT:
The Hang Seng hit 12,201 on Jan 4 1994. (all the way up to 12,599 intraday). So in the exactly 3 1/2 years leading into the peak in 1997 the Hang Seng was only up 26.8%. Contrast this with the Nasdaq Comp which was up 108% in just 12 months at it's top, and was up 339% in the 3 1/2 years preceding it's top!
Big difference between a 27% rise and a 339% rise leading into a top. Also, the Hang Seng broke to 4 year lows before recovering, while our Nasdaq at it's worst (1619) never even broke the Oct 1998 lows.
Furthermore the Hang Seng today only sits about 8-9% higher than it did when it peaked in January 1994. That's a 9% return in almost 7 1/2 years which doesn't even keep up with inflation. You are basically underwater from Jan 1994 in the Hang Seng.
There are some other examples you might be able to find such as Korea or Mexico which are much smaller and emerging markets where we gave them tens of billions of dollars to bail them out! When the world announces a bailout package for the US maybe I will turn bullish and buy expecting new highs. Aint gonna happen, although Greenspan has a bailout plan of his own. Print and spend! |
