# Are we in for a long term bear market?



## tech/a (9 October 2005)

What do you think.
Over the next year

OR will the BULL market Resume???


Hmmm

Meant to post a poll with this.
Yes 
No
Will be flat.

Can someone set it up for me I'm brain dead obviously!!


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## Joe Blow (9 October 2005)

*Re: Are we in for a long term Bear market??*

Poll added.


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## Smurf1976 (9 October 2005)

IMO the US market began a secular bear trend late 1999 / early 2000 and what we've seen over the past couple of years is simply a rather large counter trend rally which will break to the down side.

HOWEVER it is possible that the bear could simply play out as a prolonged period (probably another decade from now) of sideways movement as earnings catch up rather than see an actual major fall in the value of the index. (Though the index could fall...).

As for the Australian market, I think we could remain in a long term bull due to commodities etc. but presumably we'll get hit temporarily when the US has another down leg. If the wheels really do fall off the US economy before China develops its domestic demand sufficiently then I think we would find ourselves in trouble. 

Whatever happens I think more volatility is on the way than there has been lately.


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## Lachlan6 (9 October 2005)

The next support is 4270. also this is where important maverages are. if this breaks, look at long term trend support.


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## The Once-ler (9 October 2005)

The only reason the US market has been so crook for so long, is that it was ridiculously overvalued and has been marking time ever since as the fundamentals catch up. US companies have been growing profits at a great rate for many years. The SP500 had a peak PE of 46 or so in 2000. I can't work out why an Oct 1929 type crash didn't happen.

I think a lot of the cycles in property and shares are explained by simply looking at the average price to earnings of the markets. Is it any surprise that Sydney property is dropping? Gross rental yields of 2.5% two years ago. Net yields of stuff all of nothing???

I don't think we will have a crash, as there is still some value out there, and money has to go somewhere. I think that shares are getting more expensive, and at some point, they will be expensive. This could occure sometime in the future, but for now, I'm happy to ride the roller coaster.

Good luck.


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## wayneL (9 October 2005)

I didn't vote in the poll, because despite my bearishness, I have no idea when the bear will take the leading role.

The latest little bear attack may have been just a cameo appearance. Despite my initial rush of blood, I don't think this is it, yet. But it's not far away.

Certainly, as pointed out above, valuations are not ludicrously high enough to justify a crash on that basis alone. (Though in my opinion, valuations are too high, generally, for me to make any bottom drawer investments)

The problem I see is not in the stock market, or the companies themselves. The problem is more systemic, more to do with the underlying structure of the current economy.

It's true that the world is awash with liquidity, looking for a home. Strangely, this is one of the biggest problems. Excess liquidity does not necessarily mean excess wealth in the underlying economy, rather, it is leveraged liquidity; part of the derivative mechanism the US fed has used to prop up thier economy and stave off recession....amonst other things.

This has filtered through to create unhealthy personal financial situations, the great bulk of which, will slowly start to pull the economy down. 

I don't think there will be an actual crash as such, rather an extended and rather ugly bear.

My view


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## ob1kenobi (10 October 2005)

Wayne, generally I agree with your thoughts. I think the bear will come out of hibernation next year sometime, for how long, I'm not sure. The way in which the economies of the world are so closely linked to each other, something's got to give. I think the trigger will either be excess borrowings and the pressure that puts on interest rates, oil and / or the weaknesses in the US economy. I remain skeptical about the boom in Asia and the sustainability of that. Merely my thoughts, they may change in time.


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## insider (1 April 2007)

This is old


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