Look Out Below
In Michael's Oct 7th 2008 blog titled "Look Out Below" he said: "The Bottom Line is that I expect that the Stock Market will continue in its Free Fall."That was the last day the S&P traded over 1,000 and the Dow traded over 10,000. This blog is available at Equities magazine and you can read the full blog by clicking here.
A Super Bear? Based on historical data and my personal experience with the previous Super Bear market, which ended in 1982, I believe that a new Super Bear market was born on October 9, 2007. A Super Bear, which is also known as a "secular" bear is unlike your cyclical or garden variety bear market. Its birth is a signal that the major stock market indices such as the Dow 30 Industrials, S&P 500 and a...more.
Bear Market Boot Camp Bear Market Boot Camp airs each weekday from 9 - 9:30 am eastern on WZAB 880am in Miami Florida. Access to this program is available at this website either live or recorded. The program covers recent events that are applicable to a super bear market where Michael draws on his experience in the previous Super Bear which lasted from 1966- 1982.more.
Super Bull and Bear Markets (1802-2007) and Avg. Annual Returns
Super Bear Markets
Period
Duration
(Years)
Annual
Returns
1802-1815
13
+2.8%
1835-1843
8
-1.1%
1853-1861
8
-2.8%
1881-1896
15
+3.7%
1906-1921
15
-1.9%
1929-1949
20
+1.3%
1966-1982
16
-1.5%
Overall
95
+0.3%
Super Bull Markets
Period
Duration
(Years)
Annual
Returns
1815-1835
20
+9.6%
1843-1853
10
+12.5%
1861-1881
20
+11.5%
1896-1906
10
+11.5%
1921-1929
8
+24.8%
1949-1966
17
+14.1%
1982-2007
25
+13.5%
Overall
108
+13.2%
Future Blue Chips which Emerged in Previous Super Bear Mkt. (1966-1982)
Company
Year
Price*
Share Price
12/01/08
% Increase
@ 12/01/08
Fedex
1978
$ 0.75
$ 63.74
8,398%
Apple
1980
$ 3.25
$ 88.93
2,636%
Home Depot
1982
$ 0.10
$ 20.98
2,088%
Genentech
1980
$ 2.12
$ 71.80
3,286%
Wendy's
1976
$ 2.12
$ 19.21
806%
As you can see in the table (above) each secular bear is followed by a secular bull. The average secular bear has lasted 13.2 years and the average secular bull has lasted 15.3 years. The minimum duration of a secular bear or a secular bull has been eight years and the maximum duration of a secular bear has been 20 years. The maximum age for a secular bull has been 25 years and that was for the one that just ended in 2007. The overall annualized returns for secular bulls have averaged 13.2% for the past 205 years and for secular bears the returns were 0.3%. Another point that can-not be overemphasized is that the US stock market has performed in waves over the last 206 years. Long periods of secular bears that have averaged per annum returns of 0.3% are followed by long periods of secular bulls that have averaged annual returns of 13.2%. If you average the waves the average annual return over the last 206 years has been approximately 6.3% and this is slightly above the long-term rate of inflation.
Five of the USA's most well-known blue chip companies went public during the last Super Bear market, which began in 1966 and ended in 1982. At December 1, 2008, $10,000 invested in the Initial Public Offering (IPO) of Fedex, the best performer of the five appreciated to $839,800. A $10,000 investment in the IPO of Wendy's, the worst of the five appreciated to $80,600. There are fewer Initial Public Offerings (IPOs) in a Super Bear Market. However, the share prices of those newly emerging public companies tend to do well.
Written by Michael Markowski on March 3, 2010 – 9:00 am
