Mike, All bull markets are rotational bull markets, just as all bear markets are rotational bear markets. That is just the nature of the beast. Gold, Japanese and energy stocks were great buys during the bear market of the 1970s. And this bull market has not done wonders for mini-computer vendors. <G>
However, the stocks that are "values" today would have looked pricey in a bear market. For example, I remember when Coke and Merck had PE ratios of 8 times earnings and when GE had a yield of 6%. The "value" stocks of today are mostly much higher priced than those great growth stocks were then. I hear value players, including myself, talking about stocks at 12 times (like Midway) being dirt cheap. In a bear market, you can often buy a stock for its cash.
So, though the markets are rotational, nearly all the ships have risen to some degree. And in a bear market, the true values are likely to fall much less or hold their prices, but they are very unlikely to go up. The exception might be something like biotech, where great news from the lab can beat a lot of general bearish sentiment.
MB |
