Financial Standard Comments - Bear market end in sight: AMP Capital

Comment by Michael Coventry (Macquarie)

Michael Coventry (Macquarie) — Fri, 23 Nov 2012 15:34:45 +1100

I hardly think "this bear market has lasted 12 years" it only feels like it. 12 years ago at the end of November the ASX 200 index was 3274 and seven years later
a fairly decent bull market had pushed the index to very bullish all time highs of 6600 !

That, by my reckoning from there, it is more like a 5 year bear market and the bear market which bottomed at 3145 in March 2009 may have more suffering ahead if "it is generally accepted that these periods last around 10-15 years".

The share market at around 4400 today at around the mid point between the high and low of the last 12 years points to further uncertainty for the market going ahead over the next 12 years.

Not a market to make rash predictions on the next 12 years.

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Comment by J Townsend (Unaffiliated)

J Townsend (Unaffiliated) — Fri, 23 Nov 2012 16:08:04 +1100

To suggest this abstract statement "the longer it goes on the more chance there is of it reaching an end" is an indicator to buy equities is - to put it mildly - a tad shallow. The single reason the ASX is flat on a 12 year basis is due to the 13 trillion dollars (that's nine zeros) the major central banks of the world have printed, creating the illusion everything is fine by propping up the price of risk assets, especially equities. The 'E' side of the P/E equation is deteriorating with increasing central bank and government intervention crowding out the private sector, while the P side is being inflated by extra dollars in the system desperately seeking a return. Buy hard assets unless you think you can time the trade well enough to get out before this ponzi scheme of sorts blows up. Good luck.

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Comment by Stephen Nordstrom (Masepi Superannuation)

Stephen Nordstrom (Masepi Superannuation) — Fri, 23 Nov 2012 18:39:04 +1100

My comment is a number of rhetorical questions.Did Shane Oliver come close to predicting the start of the bear market,or the sub-prime mortgage debacle? Have we really had capitulation yet?

Compared to the Great Depression? Do most people realise that the Dow Jones Industrial Average did not recover until 1955 (26 years duration)? Doesn't the fact that the Federal Reserve will keep their zero interest rate policy going at least until mid 2015,give us time to pause? Doesn't it worry Shane Oliver that the Fed has no exit strategy except to increase interest rates and remove a huge amount of money from the US economy?

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