Michael J. Fox, call your agent. Richard Bernstein is increasingly
convinced that stock investors are going back to the future – not as
Marty McFly but as Alex Keaton, the conservative, capitalistic teenager
in the 1980s hit show “Family Ties.”
Bernstein, a veteran market strategist who runs Richard Bernstein
Advisors LLC, a New York-based independent investment adviser with $1
billion in assets, is celebrating the Dow
record and the bull market’s fourth birthday by partying like
it’s 1982 – as in equating 2013 with the start of one the most powerful
bull runs ever.
In a research note that is generating plenty of online buzz, Bernstein says this bull is similar to the 1980s market conditions — large-company U.S. stocks averaged 19.9% annualized gains between 1982 and 1986.
“The current bull market might be one of the strongest of our careers, and could potentially rival the 1980s bull market,” wrote Bernstein, the former chief investment strategist at Merrill Lynch.
How is 2013 like 1982? Let Bernstein count the ways. Then, as now, investors were concerned about Federal Reserve policy, a slow-growth economy, Iran, the prior decade’s sub-par stock returns, federal budget deficits and tax reform.
“Despite what many might suggest, the uncertainties associated with the current cycle are not unique,” Bernstein says.
Moreover, the typical signs of an imminent bear market – investor overconfidence, restrictive Federal Reserve policy — are nowhere to be seen, Bernstein notes. See what other leading bulls and bears are saying about this market.
Bull markets end when the Fed takes away the proverbial punchbowl and short-term interest rates rise higher than long-term rates, Bernstein points out. The Fed has indicated that does not intend to tighten credit availability anytime soon.
Similarly, bulls get hit when investors become enthralled with stocks. That’s hardly the case today, Bernstein says.
“Many investors still do not even believe that a bull market is underway,” he wrote. “Investors continue to search for 5% yields and seemingly ignore the much higher total returns that stocks have been producing.”
Indeed, as is true of bull markets, including this one, individual investors don’t get on the train until it’s long past the station. Eager latecomers in the 1980s climbed on board just in time for the October 1987 crash.
http://blogs.marketwatch.com/thetell/2013/03/07/rich-bernstein-channels-alex-keaton-in-calling-a-1980s-power-bull-rally/
In a research note that is generating plenty of online buzz, Bernstein says this bull is similar to the 1980s market conditions — large-company U.S. stocks averaged 19.9% annualized gains between 1982 and 1986.
“The current bull market might be one of the strongest of our careers, and could potentially rival the 1980s bull market,” wrote Bernstein, the former chief investment strategist at Merrill Lynch.
How is 2013 like 1982? Let Bernstein count the ways. Then, as now, investors were concerned about Federal Reserve policy, a slow-growth economy, Iran, the prior decade’s sub-par stock returns, federal budget deficits and tax reform.
“Despite what many might suggest, the uncertainties associated with the current cycle are not unique,” Bernstein says.
Moreover, the typical signs of an imminent bear market – investor overconfidence, restrictive Federal Reserve policy — are nowhere to be seen, Bernstein notes. See what other leading bulls and bears are saying about this market.
Bull markets end when the Fed takes away the proverbial punchbowl and short-term interest rates rise higher than long-term rates, Bernstein points out. The Fed has indicated that does not intend to tighten credit availability anytime soon.
Similarly, bulls get hit when investors become enthralled with stocks. That’s hardly the case today, Bernstein says.
“Many investors still do not even believe that a bull market is underway,” he wrote. “Investors continue to search for 5% yields and seemingly ignore the much higher total returns that stocks have been producing.”
Indeed, as is true of bull markets, including this one, individual investors don’t get on the train until it’s long past the station. Eager latecomers in the 1980s climbed on board just in time for the October 1987 crash.
http://blogs.marketwatch.com/thetell/2013/03/07/rich-bernstein-channels-alex-keaton-in-calling-a-1980s-power-bull-rally/
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