Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Raptor's Den II -- Ignore unavailable to you. Want to Upgrade?

To: Win-Lose-Draw who wrote (295)	4/19/2003 11:42:09 PM
From: lurqer	Read Replies (1) \| Respond to of 3432

i'm curious about: how many decade-long bear markets were only down 30% after three years? In some respects, the '66 to '82 secular bear market was similar to ours. Then as now, the Delusional peak of the stock market bubble occurred some 7/8 years prior to the precipitous decline in generational spending patterns that characterize prolonged secular bear periods. OTOH, the ’29 market peak corresponded rather well with the peak in generational spending. Using inflation adjusted market data, it is interesting to note that the P/Es rapidly plunged to valuation lows after ’29, but paused in the plunge from the ’66 Go-Go market peak. In fact, the ’66 plunge resumed its fall later, coinciding perfectly with falloff in generational spending, reaching its minima in P/E in ’74. It’s almost as though a secular bear can begin with a fall from the Delusional peak because of the problems associated with over-supply (reduced CapEx), but it doesn’t reach it’s Despair depth until the consumer also severely curtails spending. Since the pending demographically induced spending reduction will occur in ’07, one might anticipate that timeframe for a minima in P/E values. While the demographics are similar between this secular bear and the ’66 to ’82 experience, there are some significant differences as well. First, the degree of the mania was much more severe this time. Secondly, the deflationary effects of globalization are far more powerful now. Both of these factors are likely to exacerbate our current problems relative to our experiences in the ‘70s. Just My View lurqer