“At the start of the century’s troubled teens, who would’ve predicted U.S. stocks would not only lock themselves into the longest bull market ever, they’d also do better than they ever had before? But that’s exactly what happened.”
That’s just a snippet from a Bloomberg article published over the weekend titled,“The bull market almost no one saw coming,” and the whole notion just doesn’t sit well with Jani Ziedins of the Cracked Market blog.
”The title triggered me a little bit. I saw this bull market coming from a mile away, and you should have seen it too,” he wrote in a post on Monday. “I’m not psychic or anything of the sort, but to me, this decade long bull market was fairly obvious to anyone who spent time looking at long-term historical charts.”
He pointed to this one, in particular:
As you can see, over the past century, there have been several “lost decades” in which stocks struggled mightily to climb back to old highs, the most recent being the post-bubble period from 2000 to 2013.
“While everyone was giving up hope 10 years ago after the financial crisis, I saw tons of opportunity,” Ziedins said. “Sure, stocks obviously got too far ahead of themselves during the dot-com bubble and again during the housing bubble. But after a decade of trading sideways, a lot was happening in the real world that wasn’t being reflected in stock prices. In real terms, stocks were actually getting cheaper as the economy grew and equities failed to keep up.”
He flagged several similar periods of darkness throughout history, such as the 1910s, 1930s, 1940s, and 1970s — decades where nasty bear markets crushed stocks and turned entire generations of investors into cynics.
“But just when the masses had given up all hope, the market stunned us with the 1920s, 1950/60s, and the 1990s,” Ziedins explained. “Four times the market lost a decade and four times the market came roaring back. Was the 2000’s ‘Lost Decade’ going to be any different? No, of course not.”
What does that mean for where we currently find ourselves?
“Is this bull market tired? Is a crash long overdue? Not if you look at history,” Ziedins said, citing the bull stretch from the early 1980s to the late 1990s. “We could easily see another decade of strong gains before the next ‘Big One.’ Of course, the worst day in stock market history happened during that 20-year bull market in 1987, so we cannot be complacent. But the prognosis for the next 10 years is still good even if we run into a few 20% corrections along the way.”
Not much of a shaker happening in Tuesday’s session, with the Dow DJIA, +0.28% and the S&P SPX, +0.10% both slightly higher. The Nasdaq COMP, +0.01% , however, was edging into the red.
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