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?

Spxbullbear


p/s Keiko Kitagawa

5 comments:

hng said...

Dear Dali

With deepening economy crisis, Market sentiment already very fragile and sluggish trading volume. Nonetheless, in current bearish market, i wonder why our two local big giant bluechip, namely Maybank and TMI still intend to raise capital through right issue (issue at 30-40% discount for Maybank and up to 350% discount for TMI!?), which not only further dampen market sentiment but also weight down on overall equity market. I can't imaging bursa index level, if Maybank and TMI trading at their ex-right price level in next 3 month!

Maybank intend to raise RM 6 bilion, involving issue 2121m new share based on 9 : 20 ratio at right RM 2.71.

While TMI intend to raise RM 5.25 bilion, involving issue 5254m new share based on 1.4 : 1 ratio at right price RM 1.00.

Salvatore_Dali said...

hng,

there is never a good time to do rights issue... the plans to raise the rights probably was made 3 months back, just that the news to come out now looks pretty dismal...

i don't mind good rights issue, yes it will depress share prices as many might not be able to go through with it... but it will truly reward long term shareholders ...the type that takes all bonuses splits and rights and not sell one share...

capital raising is smart now if they can pull it off, sell the mother shares...

BUY THE RIGHTS to the rights when they trade, its a better way to go long

hng said...

Many thanks, buy the right to the rights is good idea for cheap entry. Need to wait another 2-3 months for the right issue to be completed

yj said...

Bro, I really hope u r right man...cannot tahan already....

GOH said...

Sir,

Can you enlighten me, what do you mean by buy the right to the rights