"Bears are like broken clocks, they are only right twice a day."
This is a statement that is often thrown out during rising bull markets by the inherently optimistic crowd. However, such a statement really points to the ignorance of those that make such a claim. Why? Because if the "bears" are right twice a day, then the "bulls," logically speaking, are wrong twice a day as well. In the game of investing, it is the timing of being "wrong" that is the most critical.
The chart below shows the bullish and bearish cycles, in terms of "real," inflation-adjusted price, for the S&P 500 from 1871-present.
(click to enlarge)
Throughout history, bull market cycles are only one-half of the "full market" cycle. This is because during every "bull market" cycle, the markets and economy build up excesses that… Read More …
