Hi,

hatte mir den Text glaube ich von Cornerstone kopiert und bevor ich alles lösche nochmal fürs Forum (wer es noch nicht kennt)

What Happens During a Bear Market


It doesn’t have to be a panic…

"on the way down", it’s not massive selling that accelerates the decline, it’s simply lack of buying. - What’s it Like at The Top?, ContrayInvestor.com, 2/8/00

The Bottleneck is number of shares for sale. As hard as it may be to imagine, in a bear market, each share for sale weighs on price. - What’s it Like at The Top?, ContrayInvestor.com, 2/8/00



What goes up… It’s part of the cycle.

"…All of this puts downward pressure on prices and interest rates. It’s all part of the natural cycle… In the face of falling prices, once-booming companies can’t pay off their investors and lenders. There are stock-market bubbles, banking crises, credit crunches and unemployment…" - Lawrence Lindsey, former Fed governor, to Jim McTague, Barron’s, 11/30/98

Margin debt, corporate debt, government agency debt, consumer debt, derivative risks are all based so much upon the perpetual bull market machine. And once that machine takes a hit, the dominoes will fall that much faster on the downside than they were put up even on the magnificent upside. Bear markets are always faster than bull markets when the rug is jerked out from under the unsuspecting lemmings. - Don Hays, Morning Comment, 1/12/00



Without warning… Most people are blind to the warnings anyway.

As Mr. Greenspan noted last year,"History tells us that sharp reversals in confidence happen abruptly, most often with little advance notice… Whether Dutch tulip bulbs or Russian equities, the market price patterns remain much the same." - Greg Ip, WSJ, 1/18/00

The boom had become a full-fledged stampede… Otto Kahn looked back toward the early days of September 1929 and concluded that the speculative movement had gained so much momentum by that time that nothing short of a crash could have brought it under control. The American public, Kahn testified, was determined to speculate…’ - William Fleckenstein, The Contrarian, 9/29/99



How bad can it get?

The 1973-1974 bear market was indeed ferocious. It smashed the Dow Jones Industrial Average by 46% over a two-year period, and it did even more damage to smaller cap stocks. By the end of 1974 the ValueLine Index, …was down 75% from its 1968 peak and down 95% on a real basis adjusting for inflation over the period. A 95% decline is about as bad as it gets. - George Vanderheiden, Portfolio Manager Fidelity Investments, 6/99

…at the beginning of 1990 after several months of Japanese central bank tightening aimed primarily at deflating the accompanying speculation in Tokyo real estate, the Japanese market commenced a two and a half year decline. The decline took the Nikkei from 39,000 to approximately 14,500 at its initial low in 1992. It did not hit its final low point of approximately 13,500 until 1998. Ten years after the peak, prices are still less than half of the former top. The primary reasons previously given for Japanese strength are now given as reasons for Japanese weakness. - Special Report, AIS Capital Management, 12/27/99

And just for the record, investors who bought stocks in December of 1899 in anticipation of a lively 20th century, had little to show for their foresight as late as 1921. - David Tice, CBS MarketWatch, 12/30/99

black elk



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