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» Normxxx - A Primary Bear Market

A Primary Bear Market
By Richard Russell, (snippet) Dow Theory Letters
http://normxxxruminates.blogspot.com/200...

-- posted by Normxxx

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» Jas_Jain - Great Comments, Perma! -- Re:A superbear turns bullish

In response to Great Comments, Perma! -- Re:A superbear turns bullish posted by Jas_Jain:

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"I was in total agreement when Perma made the comments and now he is proven correct" ONCE AGAIN.

RR has made an ass of himself by turning bullish on Apr 27, 2007 and now he says that we are in a primary bear market. It is better to be a broken clock than to flip-flop at worst time.

Bulls (actually, pigs) better be prepared to be slaughtered. They deserve it!

Jas "the Broken Clock" Jain

-- posted by Jas_Jain

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» Jas_Jain - FWC: Russell now says bull market that began in early 1980s stil

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Talk about how people take leave of their senses in their old age. The guy was a bear until Apr'07 and now he wants to justify his mistake of turning a bull at a very bad time.

Human beings suffer from too many problems and one of them is not coming to terms with one's mistakes. I realized my mistake of voting for GWB within 2-3 months of his taking the office. Those who still support GWB are those who remain married to their mistakes. I know the kinds.

Jas
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http://www.marketwatch.com/news/story/ma...
MARK HULBERT
'The bull never left'
Commentary: Russell now says bull market that began in early 1980s still alive
By Mark Hulbert, MarketWatch
Last update: 12:01 a.m. EDT April 9, 2008
ANNANDALE, Va. (MarketWatch) -- News flash: The 2000-2002 bear market never happened.
And the 2007-2008 bear market was a figment of your imagination.
Believe it or not, those announcements in effect were made earlier this week by Richard Russell, editor of the Dow Theory Letters newsletter. He says he now believes the stock market has been in a primary bull market since the early 1980s.
The lows of October 2002 and January 2008 therefore represent nothing more than "important secondary or cyclical correction-bottoms."
As if he wanted to make sure there was no misunderstanding, Russell headlined his Web posting Monday night: "A Shocking Revelation: The Bull Never Left."
What factors could lead to such a dramatic change of heart in an adviser who earlier this year had argued that we were in a primary bear market?
The first, according to Russell, is that "the major stock averages have been building huge bases," and therefore appear ready to move much higher -- to new all-time highs, in fact. The second factor is that, at the market's low earlier this year, just as was the case at the October 2002 bottom, stocks were not even close to being as cheap as they were at the major bear market bottoms of the past.
Given these two factors, Russell says he sees "no other explanation" for what's been going on than that we've been in an uninterrupted bull market since the early 1980s.
What would a major bear market bottom look like?
Don't ask ...
"Somewhere ahead we're finally going to enter a true primary bear market, maybe one of the greatest and most tragic in history," Russell writes. "That future bear market will end with something we haven't seen since the 1980 to 1982 period, and I'm talking about great values in stocks. And when I say great values I'm talking about blue-chip stocks selling in single-digit price/earning ratios while at the same time providing dividend yields of 6-7-8%, the kind of yields we last saw at the lows of the early 1980s."
How soon will the stock market recover its losses of the past six months and reach new all-time highs? Russell's crystal ball is less clear in answering this question; he simply writes that it will happen "somewhere between 2008 and 2010."
In the meantime, he is advising clients to buy the Dow Diamonds ETF

-- posted by Jas_Jain

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» permabear - FWC: Russell now says bull market that began in early 1980s stil

In response to FWC: Russell now says bull market that began in early 1980s stil posted by Jas_Jain:

I couldn't believe this when I saw it. If true, I will have to eat crow for being wrong about the secular bear starting in 2000. I guess anything is possible. The only way that the stock market is going to see new highs in the next year or two is if the Fed and Plunge Protection Team instigate a massive reflation campaign. With the dollar already on shaky ground that would be a very dangerous move. But it may be possible to pump enough money into the system to artificically stimulate the stock market in the near term. There are consequences for any policy prescription. If the Fed and PPT do pump up the money supply enough to create a new stock market high, Weimar Republic here we come. No good choices here.

-- posted by permabear

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» allancoleman - FWC: Russell now says bull market that began in early 1980s stil

In response to FWC: Russell now says bull market that began in early 1980s stil posted by permabear:

It's not all that bad being wrong , permabear . I've been eating humble pie since being caught on the wrong side of this market this calendar year of 2008 after finishing ahead of most indexes in 2007 . I do think the Fed is willing to do anything including a zero percent Fed funds rate if necessary . And the Fed has already warned that rates could go back up just as quickly as they went down . It will be interesting to watch .

-- posted by allancoleman

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» permabear - FWC: Russell now says bull market that began in early 1980s stil

In response to FWC: Russell now says bull market that began in early 1980s stil posted by allancoleman:

Now don't jump the gun here Allan. I said "if". It is an awful big "if" in my opinion. Richard Russell's track record is shaky at best. As far as I understand it he completely missed the cyclical bull from 2003 to 2007. Jumped on board really late and then jumped on the bear side after the market already started melting down. Now after a little rebound in the market, he's back to being a super bull. I'm sticking with my secular bear market until the market proves me wrong. It's got another 6 percent or more to do so.

-- posted by permabear

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» allancoleman - FWC: Russell now says bull market that began in early 1980s stil

In response to FWC: Russell now says bull market that began in early 1980s stil posted by permabear:

And the " fullness " of time , permabear , in this case is only six to nine months til year's end . Figure we'll all know in six months by fall what year's end will bring .

-- posted by allancoleman

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» Jas_Jain - FWC: Meeting with my investment mentor – Richard Russell

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FWC: Meeting with my investment mentor - Richard Russell

"Remember, one of the most important Dow Theory concepts is that bear markets end with stocks at great values. Stocks were not great values in the classic sense at October 2002 or January 2008."

That is because they will be great value in the coming years, Mr. Russell. You are senile and someone needs to inform you of that condition. You should have quit in March 2007 while you were still ahead. Since then you are delusional about the bull market. Do T-Bills out-perform S&P500 in total returns for more than 8 years in a bull market?

I know that you are counting on big inflation to give you a bull market in nominal dollars but that ain't gonna happen.

Jas

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Fri 11 Apr 2008
Meeting with my investment mentor - Richard Russell
Posted by Prieur du Plessis under Money, Markets, Investment

This morning presented one of those very special moments that I will treasure for the rest of my life. The occasion was my first one-on-one discussion with the legendary Richard Russell (having only met in groups previously). I am visiting La Jolla, San Diego to attend partner John Mauldin's annual investment conference and couldn't let the opportunity pass by to look up the 84-year old author of the Dow Theory Letters in his office in La Jolla Village.
Mr Russell hardly ever takes appointments, but I had the perfect excuse: I have just acquired a copy of the first edition of his book "The Dow Theory Today", first published in 1961, and he kindly consented to autograph the book.
This was a truly memorable encounter as I have been subscribing to the Dow Theory Letters (which have been published since 1957) for the past 25 years, and I consider Mr Russell as my mentor (albeit not in person) in the common-sense faculty of investment.
We shared a few stories as I was sitting next to him in front of the computer screen on which today's newsletter was taking shape. Although the visit was brief and we did not get to discuss markets in any detail, I thought a few paragraphs from Monday's Dow Theory Letters would provide readers with an apt summary of how Mr Russell sees the outlook for the stock market at this point in time.
"Question: Russell, please answer this, at the January 2008 lows, stock values never came close to what we expect at a primary bear market bottom. What do you make of that?
Answer: I've thought about this situation, just as I thought about this same situation at the October 2002 lows. My answer is the following - neither October 2002 nor January 2008 represented a major or primary bear market bottom. Both, I believe, were important secondary or cyclical correction-bottoms within a continuing primary bull market. I see no other explanation. Remember, one of the most important Dow Theory concepts is that bear markets end with stocks at great values. Stocks were not great values in the classic sense at October 2002 or January 2008.
Question: Wait, Russell, whoa - are you telling me that we've been in a primary bull market ever since the early 1980s, and that we're still in that same primary bull market?
Answer: That's correct. That's what I'm saying. Somewhere ahead we're finally going to enter a true primary bear market, maybe one of the greatest and most tragic in history. That future bear market will end with something we haven't seen since the 1980 to 1982 period, and I'm talking about great values in stocks. And when I say great values I'm talking about blue-chip stocks selling in single-digit price/earnings ratios while at the same time providing dividend yields of 6-7-8%, the kind of yields we last saw at the lows of the early 1980s.
Question: What do you think could bring stocks down to those levels? What might the market be discounting?
Answer: Here I'm only guessing, but I think it could be the dollar losing its reserve currency status. If that happens, the US would no longer possess the incredible and singular privilege of printing the same money in which it is indebted. In other words, the dollar would no longer be accepted by the rest of the world as the reserve currency. And the US could no longer print itself into solvency.

...

-- posted by Jas_Jain

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» permabear - FWC: Meeting with my investment mentor – Richard Russell

In response to FWC: Meeting with my investment mentor – Richard Russell posted by Jas_Jain:

Richard Russell is taking the same view our old friend Kirk took, that the current market is a continuation of the secular bull market that began in 1982. The correction that occurred between 2000 and 2002 was just a cyclical bear correction within the much longer term secular bull market.

I find this argument to be a real stretch from a cycle theory standpoint. If the argument is true, than the secular bull market is now 26 years and counting. That would be unprecedented from a historical standpoint. Second, if it is true why did the market turn down when the S&P tested the 2000 highs three times in 2007 and failed to convincingly take them out?

The evidence supports my view more than it does Russell's or Kirk's for that matter. The secular bull market that started in 1982 ended in early 2000. At that time a new secular bear market began. A cyclical bull within the secular bear ran from March 2003 to October 2007 and the bear market resumed its longterm downtrend. That's the view I'm sticking with. And until the 2000 highs are convingly taken out, the numbers support my viewpoint.

-- posted by permabear

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» Jas_Jain - Re: FWC: Meeting with my investment mentor – Richard Russell

In response to FWC: Meeting with my investment mentor – Richard Russell posted by permabear:

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Perma,

You have been right all along except for your partisanship. You just need to grow up a bit more. People like Kirk cannot grow up; they are infantile and there is no point aurguing with them. Only suffering can get them out of their stupor.

Jas

-- posted by Jas_Jain

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