the bull is back

Doug Henwood dhenwood at panix.com
Fri Apr 20 08:00:35 PDT 2001


Leslilake1 at aol.com wrote:


>I've been reading stuff like this for two days. Whaddaya think? And, what
>DOES the Fed have in store for us next month? (See end of article). I read
>the bear market was only officially declared March 13 or thereabouts. Do
>bear markets typically last under a month? Is there even such a thing as a
>"typical" bear market?

Not really. In the late 19th century, bear markets lasted an average of almost 3 years, and took over 30% off stock prices. In the early 20th century, the price damage was roughly the same, though they lasted only half as long. There hasn't really been a sustained bear market in the U.S. since the mid-1970s (two years, 43% off). There was a 4-month bear around the 1987 market crash, and a mild 4-month bear in 1990, but nothing deeply savage - meaning something with real economic consequences, like the deflations of the late 19th century, the 1930s depression, or the 1970s stagflation. The latest bear is about a year old, if you use the Nasdaq, or eight months old, if you use the S&P 500; the Nasdaq is off bigtime, but the S&P is off just 17% from its peak. (All these stats are using monthly averages, not daily prices.) After what amounts to a two-decade bull market, it seems a bit optimistic to think it's over so soon. But maybe I'm wrong.

Doug



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