Where is the bear market rally?

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Feb 25, 2009 11:10 pm

even in really bad bear markets there is usually at least a bear market rally. Where the helll is it?

Feb 25, 2009 11:17 pm

we have had two 20% rallies in the past 5 months.  What do you consider a bear market rally?

Feb 26, 2009 12:39 am

It was yesterday.  Hope you enjoyed it!

Feb 26, 2009 10:40 am

Probably seeing one here, how strong it will be, who knows? Then back down, if we can keep from making new lows we might have a chance of a good 2010.

Feb 26, 2009 11:09 am

It's a secular Bear Market.  Nobody on this forum was in this business during the last Secular Bear (pre-80's).  Cyclical Bulls and Bears behave differently when sandwiched inside a Secular Bear vs. a Secular Bull.  The last Secular cycle was the 82-99 Bull, where pretty much everything you threw against the wall grew, despite a few Bearish cycles during that time.  The current Secular BEAR market seems different, because it IS.  But it's not different than the last Secular BEAR, which none of us really experienced as advisors (66-82).

 
Even when we climb out of our current recession/cyclical Bear, it does NOT mean we are out of the Secular Bear.  Secualr markets typically last 10-20 years.  So even if we have a 3 or 4 year Bull run, we may lose all of that gain again (which is why we just erased most of the gains from the cyclical Bull of 2003-2007, and we have erased 11 years of growth, dating back to the end of the last Secular Bull).
 
Sounds like I'm talking in circles, but Google "Secular Bear" (or Bull) and do the research.  Plenty of history.  It's not "different this time", it's just different than the last secular cycle.
Feb 26, 2009 11:17 am

B24, when do you consider that this cycle started?

Feb 26, 2009 11:20 am

B24, never mind, I see that you believe this cycle started in '08

Feb 26, 2009 3:46 pm
DixieDog:

B24, never mind, I see that you believe this cycle started in '08

 
Current Secular cycle started in 2000, current cyclical cycle started in the end of 2007.  I know I sort of talked around in circles.
Feb 26, 2009 4:12 pm
B24:

It's a secular Bear Market.  Nobody on this forum was in this business during the last Secular Bear (pre-80's).  Cyclical Bulls and Bears behave differently when sandwiched inside a Secular Bear vs. a Secular Bull.  The last Secular cycle was the 82-99 Bull, where pretty much everything you threw against the wall grew, despite a few Bearish cycles during that time.  The current Secular BEAR market seems different, because it IS.  But it's not different than the last Secular BEAR, which none of us really experienced as advisors (66-82).

 
Even when we climb out of our current recession/cyclical Bear, it does NOT mean we are out of the Secular Bear.  Secualr markets typically last 10-20 years.  So even if we have a 3 or 4 year Bull run, we may lose all of that gain again (which is why we just erased most of the gains from the cyclical Bull of 2003-2007, and we have erased 11 years of growth, dating back to the end of the last Secular Bull).
 
Sounds like I'm talking in circles, but Google "Secular Bear" (or Bull) and do the research.  Plenty of history.  It's not "different this time", it's just different than the last secular cycle.
 
I've been talking to a lot of Jones guys about strategies they've used in the past with their clients during the "good times."
 
One guy said he'd regularly take gains from mutual funds and put them in bonds. It makes sense, but I always thought that's why we hired mutual fund managers: to take the gains when they think they've squeezed the most out of their various positions.
 
Obviously, I'm terribly wrong and probably need to learn to do more actual money management instead of just farming it out and expecting someone else to do a good job.
 
I was looking over a lady's portfolio with Lord Abbett this morning. She invested $100K four years ago. It was at $125K in October '07 and is worth $77K today.
 
Someone please remind me again why the client is paying me AND all those CFAs? 
 
I'm baffled.
Feb 26, 2009 5:46 pm

Borker - It's not all the manager's faults. It's the nature of mutual funds in general. I don't know what fund you were using for this lady, or if it was a 3-pack, 4-pack or whatever wholesalers are selling these days. I know you are supposed to get some sort of management out of those funds and that you will be "diversified" if you buy the 3-pack - but really?



For instance, by prospectus, the Affiliated is required to invest 80% of it's assets in large-caps. Even if you have a smart manager, what can you do when 80% of the companies you invest in have been getting (or if they can see the writing on the wall) slammed?



The funny thing is, Affiliated is pretty flexible, having worded the prospectus to have the option to use derivatives to hedge and include the ability to invest in short-term fixed income. I wonder how much of it was the manager's fault though.



You also have a problem with companies like American Funds with their "multiple portfolio counselor" approach. If all of their counselors think that it's a good idea to have money in BAC from 40 to 5... guess where a good portion of the portfolio is going?

Feb 26, 2009 6:24 pm

[/quote]
 
I've been talking to a lot of Jones guys about strategies they've used in the past with their clients during the "good times."
 
One guy said he'd regularly take gains from mutual funds and put them in bonds. It makes sense, but I always thought that's why we hired mutual fund managers: to take the gains when they think they've squeezed the most out of their various positions.
 
Obviously, I'm terribly wrong and probably need to learn to do more actual money management instead of just farming it out and expecting someone else to do a good job.
 
I was looking over a lady's portfolio with Lord Abbett this morning. She invested $100K four years ago. It was at $125K in October '07 and is worth $77K today.
 
Someone please remind me again why the client is paying me AND all those CFAs? 
 
I'm baffled.

[/quote]

Maybe the guy you talked to would have sold 25k of Lord Abbet in Oct. 07 and bought  couple of 6 percent Fannie Mae or corporate bonds. It's admittedly a crude way to do it, but it locks in gains and makes the client more conservative. ... I sure wish I gotten out the Switch Letters and done more of that.



Feb 26, 2009 9:24 pm

Why should there be a rally? Has anyone heard any news, financial or otherwise, that would trigger a buying frenzy?



No, I don't think we can even see the bottom from here. I certainly hope I'm wrong......

Feb 26, 2009 9:35 pm
Borker Boy:
B24:

It's a secular Bear Market.  Nobody on this forum was in this business during the last Secular Bear (pre-80's).  Cyclical Bulls and Bears behave differently when sandwiched inside a Secular Bear vs. a Secular Bull.  The last Secular cycle was the 82-99 Bull, where pretty much everything you threw against the wall grew, despite a few Bearish cycles during that time.  The current Secular BEAR market seems different, because it IS.  But it's not different than the last Secular BEAR, which none of us really experienced as advisors (66-82).

 
Even when we climb out of our current recession/cyclical Bear, it does NOT mean we are out of the Secular Bear.  Secualr markets typically last 10-20 years.  So even if we have a 3 or 4 year Bull run, we may lose all of that gain again (which is why we just erased most of the gains from the cyclical Bull of 2003-2007, and we have erased 11 years of growth, dating back to the end of the last Secular Bull).
 
Sounds like I'm talking in circles, but Google "Secular Bear" (or Bull) and do the research.  Plenty of history.  It's not "different this time", it's just different than the last secular cycle.
 
I've been talking to a lot of Jones guys about strategies they've used in the past with their clients during the "good times."
 
One guy said he'd regularly take gains from mutual funds and put them in bonds. It makes sense, but I always thought that's why we hired mutual fund managers: to take the gains when they think they've squeezed the most out of their various positions.
 
Obviously, I'm terribly wrong and probably need to learn to do more actual money management instead of just farming it out and expecting someone else to do a good job.
 
I was looking over a lady's portfolio with Lord Abbett this morning. She invested $100K four years ago. It was at $125K in October '07 and is worth $77K today.
 
Someone please remind me again why the client is paying me AND all those CFAs? 
 
I'm baffled.
 
Borker, with all due respect, you are a complete numb-nut if you think it's a mutual fund manager's job to get out of harms way.  It is their job to manage TO THE FUND'S MANDATED OBJECTIVE to the best of his ability.  He(or she), BY LAW, CANNOT move out of harms way (unless the fund's prospectus allows it).  IT IS YOUR JOB TO PICK THE FUNDS WITH THE APPROPRIATE OBJECTIVES FOR YOUR CLIENT.
Look at it this way, if you managed to style boxes, and only bought index fnds, wouldn't you be a bit pissed off if your MSCI World Ex-USA Index manager decided to take a flyer and started buying up U.S. Treasuries? or Gold? or Commodities?
It drives me nuts when seemingly intelligent financial people blame fund managers for blowing up.  Now, blame your managers for underperforming their peer-group.  Blame them for buying the wrong companies (or whatever the fund buys).  But don't blame your small-cap growth manager for not going into Treasuries last year.
And READ YOUR PROSPECTUSES.
Feb 26, 2009 11:16 pm

I think it may have all already been said, but what would you have said to your clients if their equity income fund managers moved 100% to cash and the income stopped?  The funds have to stay invested because the shareholders demand it.


Do one of us Jones guys need to remind you of the milk/cow analogy? 
 
 
Feb 26, 2009 11:54 pm

rally coming...brokers sounding too dire...

 
early may, resume slide to retest or new slows through summer