This is a message for the handful of bears that still exist in our world. I am one of you. We are the one out of a million (and that is a generous estimate). The past month has been awful for the bears. But I am here to try to give you some perspective about the history of major bear markets.
Look at this chart of the 2000-2002 bear market. Every one of those counter-trend rallies was vicious and brutal to the bears. And I’m sure that every single time, the pundits said It’s Finally Over. And, just like you’ll find something you’ve lost in the last place you look, likewise the only time they were right was at the final counter-trend bounce. These rallies are nothing short of gargantuan, and they all led to bulls getting clipped.
Likewise, look at the 2008 bear market. On four separate occasions was a hearty multi-month rally.
So are we in a bear market now? In spite of the past month’s horrors, I still believe we are, and I likewise believe that the violent bouts of buying are no different than what we’ve seen in other bear markets. I would also say that getting into puts when the VIX is at 20 is sure a lot safer than when it’s at 40, like a month ago.
And, if nothing else, I will offer you this brand new truth:
