Are We Still In A Secular Bear Market?

This is one of my favorite questions to argue back and forth about. I don’t think there is a right or wrong answer here and a solid argument can probably be made for both sides. But still interesting to think about. To me, it’s important to have some kind of road map in your head based on historical cycles. We still try to keep an open mind, but a game plan nonetheless.

The more common response that I hear is YES, we are still in a secular bear. If the last Secular Bull ended in 2000, then we’re 12+ years into this one. Once we complete the cyclical Bull Market that got going in March of 2009 (3 1/2 yrs ago), we should have one more cyclical decline before the next Secular Bull market gets going. This is the more common and, in my opinion, the more logical conclusion.

But there is an ongoing whisper from some smart guys I know, Ralph Acampora being one of them, that the next Secular Bull Market got going in March of 2009. My friend Jeff Hirsch also believes that we see a 500% rally from those ’09 lows that should take us somewhere above 38,000 in the Dow Jones Industrial Average by 2025. But he believes that we probably have another cyclical bear, and several of these cycles, between now and then. Doug Short makes some great points in this post as well.

It’s certainly an interesting question to ponder. Here is a inflation-adjusted chart of the S&P500 that goes back to the 1800s. You can see that these cycles have been taking place for over a century: (click chart to embiggen)

What do you think? Was that a generational low for stocks back in 2009? Do we have another Cyclical Bear before the next Secular Bull Market gets going? Or are we already in one?



Secular Bull and Bear Markets (dshort)