Time Dependency Of Bull Markets

Tyler Durden's picture


Via Alexander Gloy of Lighthouse Investment Management,

Stock market performance during bull markets is mainly (89%) explained by the duration of the bull market (defined as an uptrendwithout any pull-backs of 20% or more). The conclusion: As long as no shock rocks the boat, the expected market return is +22% per annum. The current bull market (+117%) is a tad ahead of the expected performance. Time-dependency matters more in bull markets. In bear markets, fundamentals (or initial conditions) matter most. What does this mean for current market environment? Valuation is, depending on what you look at, either cheap (P/E ratio) or expensive (P/E 10,Tobin's Q, regression etc). Hence, all eyes have to be on the look-out for any external shocks.

Time dependency of bull markets by gloeschi

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Thu, 01/17/2013 - 20:40 | 3164646 LongSoupLine
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The current bull market (+117%) is a tad ahead of the expected performance.



That's because it's not a "bull market", it's a Fed fucking printing ponzi.  All fucking rules, measurements and historical comparisons are fucking useless.


Fuck you Bernanke...asshole.

Thu, 01/17/2013 - 21:01 | 3164701 Dr.
Dr.'s picture

Easy Tiger!

The game is 120pc up, 60pc down.

Wash, rinse, repeat. 'Til you decide it's time to play something else. 




Visualization attached.



Thu, 01/17/2013 - 21:44 | 3164836 Thomas
Thomas's picture

I detest calling these temporary ramps a bull market too. A bull market doesn't unwind like these do. Secular is the key.

Thu, 01/17/2013 - 23:03 | 3165072 LongSoupLine
LongSoupLine's picture

ok Dr, thanks....visualization helped.

Thu, 01/17/2013 - 20:41 | 3164647 Goldilocks
Goldilocks's picture

David Wilcox - Do The Bearcat (with lyrics)
http://www.youtube.com/watch?v=fQDoj9bFjlI (3:30)

Thu, 01/17/2013 - 20:46 | 3164663 chump666
chump666's picture

" Quotes from: Order Out of Chaos, Man’s New Dialogue with Nature, by Ilya Prigogine and Isabelle Stengers, Bantam Books, New York, 1984:   

"While some parts of the universe may operate like machines, these are closed systems, and closed systems, at best, form only a small part of the physical universe.  Most phenomena of interest to us are, in fact, open systems, exchanging energy or matter (and one might add, information) with their environment.  Surely biological and social systems are open, which means that the attempt to understand them in mechanistic terms is doomed to failure.”  

“This suggests, moreover, that most of reality, instead of being orderly, stable and equilibrial, is seething and bubbling with change, disorder, and process.” 

“In Prigoginian terms, all systems contain subsystems, which are continually 'fluctuating'.” 

Very good book relating to chaos theroy http://www.goodreads.com/book/show/783285.Order_Out_of_Chaos

Something is stirring in the mechanics of this market, starts small, then BAM! The sh*t splats.

Thu, 01/17/2013 - 21:16 | 3164743 q99x2
q99x2's picture

Entropy ends in lights out.

Thu, 01/17/2013 - 20:51 | 3164678 fourchan
fourchan's picture

its time to start shorting.

Thu, 01/17/2013 - 20:53 | 3164684 ClassicCommodity
ClassicCommodity's picture

It's time this thing finally imploded. Who's with me?

Thu, 01/17/2013 - 20:56 | 3164690 waviator
waviator's picture

The prices are going up, but that value is unchanged. Hmmm....Is that what you mean by a bull market?

Thu, 01/17/2013 - 21:06 | 3164717 Joe moneybags
Joe moneybags's picture

The current bull market, denied by some for nearly 3 years and 9 months, is behaving very typically, even if it has been fostered by very un-typical Fed policy. The article also makes it clear that these bull runs have not yet ever ended in a "permanently high plateau".  You either keep the party going, or fall heavily.  That's why all are keeping an eye on the Market, waiting for the big stumble.

Thu, 01/17/2013 - 21:07 | 3164721 DowTheorist
DowTheorist's picture

This post is in line with the current Dow Theory primary bull market signal. According to the empirical record (which is no assurance of future market action but has been proven dependable in the past), the odds favor the continuation of this bull market during several months. Over 70% of primary bull markets ended with profits.




Thu, 01/17/2013 - 21:12 | 3164739 lemosbrasil
lemosbrasil's picture

The hard bearish divergences between "bullish percent" and  SP500 shows a hard correction is coming.....and we are so close.......

see here: http://pracompraroupravender.blogspot.com.br/2013/01/nova-e-forte-diverg...

Thu, 01/17/2013 - 21:23 | 3164770 devo
devo's picture

Stocks look expensive to me given poor future earning prospects, but they keep going up, I don't quite understand what people are so exuberant about.

Thu, 01/17/2013 - 21:30 | 3164787 Nid
Nid's picture

It ain't people...

Thu, 01/17/2013 - 21:40 | 3164822 El Hosel
El Hosel's picture

Its not the people making stocks go up, the machines do it. The people/Banksters sell the story.

Thu, 01/17/2013 - 21:28 | 3164781 Nid
Nid's picture

I'm confused, are we referring to the Bull Market prior to 2011's -20+% Bear Market, or the one since?

Thu, 01/17/2013 - 21:36 | 3164813 knowless
knowless's picture

never got the bull/bear analogy until now. bulls look over the heard, waiting for the strike: http://www.youtube.com/watch?v=LU8DDYz68kM bears tear at the edges.. i think that makes me dumb. keep the heard together, expendables get puched out of center. they won't defend them as long as the herd can move.

Thu, 01/17/2013 - 21:52 | 3164863 knowless
knowless's picture

4:45 is a valid argument for non hominid sentience

Thu, 01/17/2013 - 21:43 | 3164829 max2205
max2205's picture

Bull markets don't kill people, people do.

Thu, 01/17/2013 - 21:45 | 3164838 cnhedge2
cnhedge2's picture

bull market is time dependent? what is not? http://www.cnhedge.com

Thu, 01/17/2013 - 21:52 | 3164861 Smuckers
Smuckers's picture

Bullish for Vaseline!

Thu, 01/17/2013 - 22:56 | 3165052 vote_libertaria...
vote_libertarian_party's picture

'external shocks'?


I could list about 100 of those over the past 3 1/2 years...

Fri, 01/18/2013 - 08:15 | 3165616 Hetty Green
Hetty Green's picture

But... this time it's different!

Fri, 01/18/2013 - 08:42 | 3165649 Mesquite
Mesquite's picture

The Cheerleading is reaching a crescendo.

Gotta get more sheeple in for the shearing..

I'll stick to the charts, thank you...

Be safe all..

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