Wednesday, March 04, 2009
How Massive Is The Current Bear Market?
How massive is this bear market? The people at Bespoke Research has compiled a list of all bull and bear markets. Take the Depression out of the equation because the economy wasn't that global then, and they did very little fiscal and monetary fixes - I mean our grandparents were more or less doing farm work or mining, and if things got real bad, you just plant stuff and live off the land and sea. Maybe 20 years ago Malaysians can still balik kampung when things get really bad, which is our safety net really. Now you balik kampung also no more kampung for you to live off the land. Luckily the many rural Chinese folks who went to cities in China to work, well some 20m have been laid off and have been trudging their way back to their hometowns. At least most of them won't be starving, they can still live off the land and rivers. Our rivers now also koyak due to over development and environmental degradation.
The two biggest bears in recent times were:
a) from November 73 - March 74, lasting 630 days, markets fell 48% (pussies)
b) from March 2000 - September 2001, lasting 546 days, markets fell 36% (chicken feed)
The current bear market which technically started in November 2007, had a very tiny technical bull market (which is defined as a market rising 20% or more) which lasted just 47 days. I would take that small bull run out of the equation, which would make the current overall bear market at 463 days long, and losing 51% so far in equity values. To overtake the (b) bear market we are just 2.7 months away, and we should take that out easily. To overtake the 73/74 big bear, we are about 5 and a half months away or sometime end August 2009. Too soon?
Well, we can look at the figures and say the glass is half empty or half full. Hang on tight, we are almost there.... famous last words?
p/s Keiko Kitagawa