원문 보기
[♪♪♪] If you've ever heard me speak or heard other people from the firm speak, you know that we often cite Sir John Templeton's legendary comments that bull markets are born on pessimism, grow on skepticism, mature on optimism, and die of euphoria, and that this bull market, which started after a very big, long bear market, had people very depressed and very, very pessimistic, leading to a very unusually long and drawn-out and joyless bull market that went on through the pessimism and skepticism phase.
Earlier, Michael made reference to the rally that began in February of last year, 2016, and, really, from our thinking, that really begins the period that starts to see some optimism in the market taking over from the prior dominant period of skepticism. We haven't gotten to the period of euphoria yet, but if you think through this kind of a visual that Michael sort of articulated earlier that shows a first third of a bull market that's relatively steep, a relatively middle flat period, and then, finally, at the end, a steeper period, we're someplace just to your right of the shaded area, where we've started into that final third, we think.
That long, grinding, slow period of below-normal returns is when it's going on impossible to tell how long it will take, but the longer it goes, and, particularly mirroring that first third, the longer the last third's to be. Now, I'd make an amendment to John Templeton's phrase. Another variation of the concept of John Templeton's four-phase model is the age-old saying that bull markets love to climb a wall of worry.
They do climb the wall of worry until you get to euphoria, unless they get hit by what we refer to as a wallop. They get the wall or they get the wallop, whichever comes first. The wallop is a big, bad, terrible thing that no one's foreseen, that kind of comes out of nowhere and knocks a few trillion bucks off of global GDP.
If you get the wallop, you can take a bull market down at any point in time, but you either climb that wall all the way to euphoria, that wall of worry, John Templeton's four-phase model, or you get the wallop. We're gonna bet that we don't get the wallop this time, although we're ever vigilant looking for it, because we got it last time...
in the 2007, '08, '09 bear market, and markets typically don't do the same thing two times in a row. Too many people are fighting the last war for that to happen, but right now we get a lot of fear that we hear from clients, and also from non-clients in the world, about things like new highs and how strong the market's been.
I want to make a couple of points. I think most people get this wrong. Normally in a bull market, the average historic return-- average annual historic return at a bull market-- is a little over 20%. In this bull market, we've had precious few of those years. I'm talking about the U.S. market. And in fact, so far this year, we're not there with the S&P 500.
The fact is, because this has been this long, grinding, joyless bull market until recently, people see this year as sort of bigger than it is, but because the first phase was so long, and that middle grinding phase you see is so long, unless we hit the wallop, that third phase is gonna be long, and as we've said now for several years, this is-- unless we hit that wallop-- gonna be, by a good notch, the longest bull market in history.
Comments 0