Thursday, 15 January 2009

Commentary: Your source for news, commentary, and stock info


464. That is how many days we are into the current bear market. Not a lot of people focus on time. People focus on large price declines and valuations to determine the end of a bear market, but time is left out of their analysis. An important part of markets is the human element. Psychologically and emotionally, it takes people a good amount of time to recover from a devastating bear market. I think it a very important aspect to consider. I put up the previous post to show the current economic contraction to previous ones. At present we are tied for 4th place in the last century. Consider this: The top 3 longest economic contractions (July '81-Nov. '82, Nov. '73-Mar. '75, Aug. '29-Mar. '33) each lasted 16 months, 16 months, and 43 months respectively. From their respective bull market peaks to their bear market bottoms, the bear market lengths in number of days was 469 days, 697 days, and 1,039 days. If you think the current bear market is going to be as brutal or worse than 1929-1933 (which I do), then we are nowhere near the end.

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