Monday, November 24, 2008

Barton Biggs: ‘The mother of all bear market rallies’

From FT Alphaville:

At the bottom of a panic, the news doesn’t have to be good for stocks to rally, it just has to be less bad than what has already been discounted. I want the markets to stop going down on bad corporate and macro-economic news. The fact that it still does shows the bad news has not yet been fully discounted. I have no idea when the next bull market starts, but I do think we are setting up for the mother of all bear market rallies.

So declares the managing partner at Traxis Partners.

Read Biggs’ full Market Insight column here

MarketBeat gives us some backround:

The Standard & Poor’s 49ers

The jury is still out on whether the equity market has reached a level that warrants buying shares — plenty of pessimists abound — but the declines in the S&P, by one measure, are best compared against the post-World War II period.

According to Bianco Research, the Standard & Poor’s 500-stock index, as of Thursday, was nearly 52% from its all-time high, the furthest the S&P has been from its all-time high since 1949 — when, at its nadir in June of that year, it stood at 57.43% from its all-time closing high. The vicious decline in the equity market in the last few weeks has caused a few long-time bears to come out of the cave, including Bennet Sedacca of Atlantic Advisors LLC, who noted Friday that his firm went “half-long” for a rally that “could last longer than some think.” He says he’s sticking to large-cap companies with strong balance sheets and “a little tech and financials thrown in.”>>>MORE

We've dropped further without a twenty percent rally than I can remember.
(too busy to dig up the stats right now, sorry)