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Historical Pattern Says The Risk Of a 2016 Bear Market Is Zero
FYI: In physics, escape velocity is the minimum speed needed for an object to break free from the gravitational attraction of a massive body. What is the “escape velocity” needed for stocks to break their down trend? Unlike in physics, there is no fail-proof formula for stocks. However, based on history, the S&P 500 just rallied strongly enough to end its down trend. How so? Regards, Ted http://www.marketwatch.com/story/historic-pattern-says-the-risk-of-a-2016-bear-market-is-zero-2016-02-25/print
Hmmm ... as of mid-February, the average US stock was down 25% from its peak last June. Doesn't that almost suggest (how to put this gently?) that the risk of a 2016 bear market is 100%?
@David: In my opinion, the economy is in good enough shape to support a bull market for the remainder of 2016 Yes, there are threats that could bring about the bull's demise in 2016, and stocks are not undervalued. However, China's economy continues to stumble and the Federal Reserve is removing the easy-money that kepts the good times rolling on Wall Street. I estimate the S&P 500 will end 2016 at 2,194 up 12% from today's close of 1,952.
@Ted (a.k.a. Chauncey Gardener) And in your dreams, all is well with The Garden, I suppose. Fa-la-la. @David_Snowball Either the definition of "bear market" has been changed in The Market Dictionary, and we didn't get the memo, or few in the MSM simply cannot bring themselves to acknowledge what has just happened. "Downtrend"....... uh-huh....... more like "first leg down" (there are always two). That's how I'm reading it, and investing accordingly.
@heezsafe: (aka. Chauncey Gardner) I hope your don't mean that I'm a simple minded moron played by Peter Seller in the Movie Being There. I have a name, and in the future I expect you to use it Ted
Please don't make fun of one of my favorite books, Being There, by Jerzy Kosiński. It's a timeless classic, applicable I suspect to our current campaign.
Ted - You used to reference some guy named Eisenstadt quite often. His predictions were very good. Anything from him lately?
You noted: "Hmmm ... as of mid-February, the average US stock was down 25% from its peak last June"
Do you or others here at MFO have a "best" reference site for this data?
A quick overview of 1 year returns for equity funds shows about the -10% range, with this number not being a lot different than a "high to low" range somewhere in June of 2015 through Feb. 15, 2016, as referenced. Funds like VTI have not been beat to death during this period.
I'm not surprised the "average" stock return had its return curve hammered from some outstanding losers during the noted period.
Well, being curious as to this data. Regards, Catch
Comments
@David_Snowball Either the definition of "bear market" has been changed in The Market Dictionary, and we didn't get the memo, or few in the MSM simply cannot bring themselves to acknowledge what has just happened. "Downtrend"....... uh-huh....... more like "first leg down" (there are always two). That's how I'm reading it, and investing accordingly.
Ted
Ted - You used to reference some guy named Eisenstadt quite often. His predictions were very good. Anything from him lately?
You noted: "Hmmm ... as of mid-February, the average US stock was down 25% from its peak last June"
Do you or others here at MFO have a "best" reference site for this data?
A quick overview of 1 year returns for equity funds shows about the -10% range, with this number not being a lot different than a "high to low" range somewhere in June of 2015 through Feb. 15, 2016, as referenced. Funds like VTI have not been beat to death during this period.
I'm not surprised the "average" stock return had its return curve hammered from some outstanding losers during the noted period.
Well, being curious as to this data.
Regards,
Catch