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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: RocketMan who wrote (33561)	5/17/2000 8:32:00 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 42523

RM, firstly, i agree..we're NOT in a bear market for the major indices (i.e. the big caps)...yet. the majority of stocks as represented by the non-cap weighted VGY and the a/d line has however been in a bear market since April '98. and regarding the '29-'32 bear, more fortunes were destroyed upon buying the dips in that one than during the actual '29 crash. it was the grand-daddy of all bear markets, and stands as a long forgotten warning to those that believe the WS 'buy and hold, you're always going to come out on top' hype. that said, i regard it as highly unlikely that modern times will produce a similarly devastating bear market barring some catastrophe like a comet hitting the earth or something along those lines (this goes solely for modern industrialized nations, and Japan may yet prove my statement wrong). i say this because e.g. Prechter argues that the Dow will fall back to the '74 low in the next supercycle bear market. that would in inflation-adjusted terms be even worse than the '29-'32 bear market, and i believe it can be safely assumed that it won't happen. however, i can easily imagine a bear market that shaves off 50-60% from the indices and much more from certain individual stocks. essentially a give-back of the bubble years when the S&P began to leave it's historical overvalue range and entered irrational exuberance territory. i know, no-one believes that that could really happen (except maybe Luc), but i think it's well within the realm of the possible once the credit and asset bubble starts to unwind. of course, it is equally possible that we go higher first, and that the denouement will begin from higher levels. unfortunately there's no way of knowing that for certain. but assuming that supercycle, secular bear markets can never occur again is totally naive...and yet, that is basically the content of the hype emanating from WS. 'risk' is a word they'd like to ban most likely, just as they wish Japan would disappear from the map so nobody can see this glaring example of a modern secular bear market.