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Only a Few Years Left in Secular Bear



November 03, 2009 – Comments (5) | RELATED TICKERS: GE , GS , JNJ

Wow, hard to believe we've been in a secular bear market for a decade now.  What's even harder to believe is that most people still haven't figured it out. 

What I've told clients, and what I'll tell the world is that the next several years will be a great time to buy investments with the likelihood of owning large hunks (sure, we'll take a partial profit here and there) of those investments for a couple decades.  What we likely are about to experience is very similar to the second half of the 1930s and second half of the 1970s as far as buying opportunities.  If you visit Cresmont Research you will appreciate the importance of those two time periods.

Warren Buffet has been cherry picking, and though we can't exactly du what he does because of slight cash balance issues, i.e. I don't have $22 billion laying around (du you?), we can come close.  Remember, cherry picking over during a bad markets decade is exactly how he did things in the 1970s.  (When he started in the 1950s had a lot to do with the law of small numbers and getting in right at the beginning of a massive bull market.) 

While I am back to 70% OUT of the stock market, and what I du have is mostly international after trading the U.S. from March to July (if you care, I have a lot in currencies right now, dollar and Yuan at the moment, Yuan I'll have for awhile, had been in Loonies and Aussies earlier this year as foolish record shows), I am licking my chops at what I'm going to be able to buy on the double, probably triple and maybe quadruple dips. 

So, I've basically showed my hand, I'm making a few bucks here and there and waiting for cherries, (for me the smaller (cap) kind).  Maybe that's not the right approach for you but Buffet seems to dig it and so du I.

5 Comments – Post Your Own

#1) On November 03, 2009 at 10:32 AM, checklist34 (98.78) wrote:

as a nod to the CAPs game community, some of the very first discussion that I read about this being a now-10-year secular bear market was here on these blogs.

As I recall, the few of us that ponied up that thought months ago were greeted with skepticism.  But indeed, here we are ... 

History suggests that we shouldn't have more than 5 years left in the big secular bear.  And it suggests that the next bull phase will bring stocks once again above their long term trend with respect to inflation adjusted returns...  

+1 rec

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#2) On November 03, 2009 at 11:08 AM, alexpaz (28.43) wrote:

Yep, preserving capital and not chasing the market will be the key in the next few years. I like BKS on valuation right now.

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#3) On November 03, 2009 at 11:02 PM, Tastylunch (28.72) wrote:

what you "du"

nice. :)

 here's the question I have Kirk..

 is whether the US resumes it's upward climb or whether our macro situation goes japan and we lose another decade...

To be honest I'm not sure which way it's going to play out. I can either as being a very real possibility.

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#4) On November 08, 2009 at 5:02 PM, kirkydu (89.81) wrote:

Hey Tasty, if your tracking maybe you'll see this. 

I'm not sure when the economy turns around.  It really depends on when we get serious about some bigtime projects we need to tackle, in particular water reclamation projects, a new smart electric grid, electric cars for city driving, new roads and bridges, nat gas buses, solar roofing in order to keep home interest write off or be able to depreciate a commercial property (which could provide almost half of the power in the country within 20 years if they would do this) and a some better nukes to replace the aging ones as the core power for the electric system. 

We'll see.  Maybe they'll keep trying to "reawaken" the consumer with smoke and credit schemes until we crash so far we need the same aid that 3rd world countries get, in which case we'll strip our resource assets for a generation before realizing, like the Latin Americans have, that it doesn't really help to export a ton of your natural resource wealth.

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#5) On November 08, 2009 at 9:46 PM, Tastylunch (28.72) wrote:


I am. thanks for the response Kirk

Sounds like we more or less see this the same way.

I was hoping that since we were going to stimulate the economy that it would be an eisenhower sized proect like a smartgrid. 

So far it seems more like option B than A unfortunately.

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