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Bull Market or Dead Cat Bounce?

Posted by billspaced | 9:42 AM | , , , | 0 comments »

The stock market has rebounded quite well since it hit the 6,000 range (Dow). The question is, will the rise continue, or will it stall. OR worse yet, is this the classic "dead cat bounce?"

It all remains to be seen, of course. Too soon to tell. But I'm going on record to say that this, even with today's announcement by the Fed that it's officially fueling inflation by printing money, is not a dead cat bounce.
Dead Cat Bounce
Oh, the market may tumble for a few days. But I think we've bottom. Just note that the bottom of the ocean has peaks and valleys, too, and that we might see 6,000 again. We may be here a while. But we're not gonna go any lower than 6k.

In fact, it is my gut feeling that we're on the upswing. I believe the end of this decade and the first few years of the next decade will be banner years for stock markets all across the land.

After all, we're at levels here in the US that we haven't seen since the mid-90s. The housing, credit, and mortgage messes weren't even in place then.

So we've fallen further than logic would dictate. John Hussman, in his newsletter, says,

As for the stock market as a whole, I continue to view the market as undervalued, but not deeply undervalued. So over the course of a 7-10 year holding period, I do expect passive buy-and-hold investors in the S&P 500 to achieve total returns somewhat above 10% annually.

But he also says,
Shorter-term, however, investors may demand much higher prospective long-term returns in order to accept risk, and that's a problem, because the only way to price stocks to deliver higher long-term returns is to drive prices lower.
After all, even a dead cat will bounce.

Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

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