Bear markets grind away at returns

In a recent article in BusinessWeek, Alan Shaw is interviewed and recalls his call that we are in an 18-year bear market. For the full article, click here. I am not a big fan of technical analysis, unless, of course, it confirms what I believe, at which point, my heuristic bias kicks in and I think it’s brilliant. That being said, Shah, and Yamada (also mentioned in the article) bring a depth of historical knowledge that is worth heeding.

We have already spoken about the fact that contrary to popular opinions, bear markets are not about picking the bottoms, since it can be virtually impossible to call those exact turning points. Bear markets grind away at investors with hope and fear, transaction costs, and false trends. Capital preservation, low leverage, and a focus on valuation will continue to win out in the long term. For those joining us more recently, and interested in historical context, please read Anatomy of a Bear, by Russell Napier (and for those cynics in the crowd, no we do not receive any kickbacks from Amazon or Napier…nor anyone else we mention on the site.)

Last 5 posts by Yaron Sadan

• Calling all themes - February 10th, 2012
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• The Hunt for Yield - January 26th, 2012
• All eyes should be on Iran - January 23rd, 2012
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