Albert Edwards: "The market is once again in a hope phase..."
One key lesson from Japan is that an essential ingredient to the end of a long valuation bear market is revulsion. It is when buyers-on-dips become sellers-on-rallies. It is when volume dries up to almost nothing. It is the loss of hope.
In Japan we saw huge rallies in the Nikkei on the back of short-lived cyclical recoveries. Each cyclical failure and further new lows in the equity market saw hope being progressively crushed. Previous US valuation bear markets typically take 4 or 5 recessions to fully play out. We have only had two.
The market is once again in a hope phase hoping that the US is now in a self-sustaining recovery; hoping that China might be soft-landing; hoping that the Greece bailout and the ECB liquidity polices have settled things down in the eurozone. These bursts of hope are essential in long bear markets. Essential in the sense that hope must be crushed. It will be crushed. Hope still beats in the breasts of equity investors. The market will rip out that hope and consume it in front of investors' eyes. Only then can the bull market begin.
- Hussman Weekly Market Comment: The Journeys Of Sisyphus
Link to: The Journeys of Sisyphus As we discussed several months ago, that hope of succeeding rests on what economist J.K. Galbraith called “the extreme brevity of the financial memory.” Part of that brevity rests on ignoring the forest for the trees,...
- Hussman Weekly Market Comment: Anatomy Of A Bear
As veteran market analyst Richard Russell has noted, investors often equate the concept of a bear market with the expectation that prices will continuously fall. Indeed, if you think back to the 2000-2002 bear, or the 2007-2009 bear, that is probably...
- Bear Investor Says 'i Have Been Too Bullish'
Albert Edwards, a global strategist at Societe Generale well known for his bearish stance, said late Monday he has got it wrong and that he has been too bullish. “I have long believed that a lost economic decade was an inevitable consequence of the...
- Albert Edwards: "we Are Returning To 450 On The S&p"
Via Zero Hedge. So far the equity market has shrugged off much of the weaker data that abounds, and has not joined the bond market in a perceptive move. The equity market will though crumble like the house of cards it is, when the nationwide manufacturing...
- Taking The E-motions Out Of Investments
Taking the (E)motions out of Investments? Easier said than done. When you invest your money, I'm assuming you're investing after a thorough thought process. One does not simply invest his/her money based on the "TOP 20 SHARES TO INVEST IN 2015"...