IceCap Asset Management: 1982 And Secular Bull Market Bias

Tyler Durden's picture

While many will remember 1982 for its disco and the movie E.T., it is perhaps best known by an investing public as the end of a 16 year secular bear market. The 10% decline from 1966 was better, however, than the 38% loss from 1937 to 1941 and the 80% loss from 1929-1932 but together this triumvirate make up the secular bear markets. Luckily, as IceCap's Keith Dicker notes, for most of the investment industry they can gloss over these extended loss periods and instead focus on the long-run secular bull markets (cue Jeremy Siegel). However, he points out that unknown to many and ignored by the rest, "we are in the middle of another long and dragged out Secular Bear Market which has seen investors lose 7% since the year 2000 - that's 12 years of hopes for nothing." Understanding secular markets and how they transition from BULL to BEAR is perhaps the most rewarding investment perspective you won’t hear from anyone else. While financial markets continue to yo-yo with our retirements, the truth is, the next Secular BULL Market is not quite ready to perk its head up just yet as Dicker addresses P/E ratios during inflationary and deflationary periods summing up his view of the world rather succinctly: "As central banks continue to bail out banks and countries, they implicitly create an investment culture whereby failure is rewarded and success is taxed to reward those who failed."

 

IceCap Asset Management Limited Global Markets April 2012

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YesWeKahn's picture

As central banks continue to bail out banks and countries, they implicitly create an investment culture whereby failure is rewarded and success is taxed to reward those who failed.

 

classic.

whatsinaname's picture

"While many will remember 1982 for its disco and the movie E.T., it is perhaps best known by an investing public as the end of a 16 year secular bear market."

1982 is when the 401k programs started in the USA. I believe it was during Reagan's time. Lots of pre-tax savings started coming into equity markets and probably bond markets too.

No surprise then that the bear went into hibernation.

AldousHuxley's picture

Friday weekend humor attempt:

 

chart 3 looks like penis and balls...with blue small pox

junkyardjack's picture

I thought the bonds over stocks like was pretty hilarious myself

orangedrinkandchips's picture

Agreed. So well put.

 

OMG....It's Atlas Shrugged.....right out of the blue...stifle innovation and reward the retards who fail.

 

Brillilant!

buzzsaw99's picture

The bull/bear market thesis is erroneous when the value of the thing you are measuring it by keeps changing as do the components of the index. Baffle them with bullshit.

jeff montanye's picture

you are absolutely right.  as the viewers here should know better than most, it is inflation/deflation adjusted values that matter and on that basis the '68 to '82 bear market was just as bad as the '29 to '32 one, about a 70% loss of value:  http://www.ritholtz.com/blog/wp-content/uploads/2011/03/3-4-11-Secular-C...

and the 2000 to 2008 run was no picnic.  on a time basis though, looks like there may be another leg or two. 

DavidC's picture

What planet is Dicker on? In 1982 we were still in a (general) secular bear market for rates, credit use was still growing. We are now at the end of a debt supercycle lasting 50 to 60 years with rates at the lowest they've ever been (certainly in the UK the lowest in the 300 plus years of the BoE's existence).

http://stockcharts.com/freecharts/historical/djia1900.html

The chart is on a logarithmic y axis.

DavidC

OpenThePodBayDoorHAL's picture

looks like a head and shoulders top to me

Village Smithy's picture

Very nicely presented.

zonkie's picture

No one can predict when this secular bear will go away, but one thing is for sure that the current exuberance (as of today's) is going to implode with at least 2-3 10% slumps going forward into the year and 2013.

Bear's picture

Each slump may occur as Obama moves to a lead in the polls and then reverse as he slides ... watch the election year yoyo

q99x2's picture

Hey wait for me. I'm going back to college to learn how to become the biggest failure in my history. And, I'll be around to collect so don't close the doors.

mkkby's picture

Just take out a huge student load, and party with it.  That guarantees your failure and eventual bailout by the successful.  No need to learn anything.

midtowng's picture

I'm pretty sure E.T. came out in 1986 or 1987.

1982 was Raiders of the Lost Ark, if I'm not mistaken.

TwoJacks's picture

you're mistaken. Raiders was 1981, E.T. was 1982

TwoJacks's picture

if a guy is going to reference Ed Easterling's work that much, you might as well read it from Easterling himself. 

The Alarmist's picture

Disco in 1982??? Well, maybe in a few pockets of the world, but disco officially ended its rein at Disco Destruction Night on 12 July 1979 at Comiskey Park in Chicago.

Quantum Nucleonics's picture

I can't say whether we're in a secular bear market or not, but I can say this article is wrong on at least on point... disco was long, long dead by 1982.  The last disco song dropped off the top 10 charts in the fall of 1979.  The top songs of 1982 were Oliva Newton John's "Let's get physical", Survivor's "Eye of the Tiger" and Joan Jett's "I Love Rock and Roll!"

I love rock and roll, put another dime in the juke box baby!!!