With the prospect of war, rising gas prices, political division, rising interest rates, rumors of a real estate supply collapse, and seemingly one crisis after another, the markets have been hit hard, with all of the euphoria from the previous year which say +1000% gains in numerous stocks and cryptos, it only makes sense that shorts sellers would pile on to certain tickers.
It's been a tough year already for many investors and capitulation and market sentiment seems to be shifting ever bearish. The real question though is, How long can this bear market continue?
For answers we can look to past bear markets for insights. The worst bear markets in history were roughly in sync with recessions. The stock market crash of 1929 was the central event in a grinding bear market that sliced 89% off the value of the Dow Jones Industrial Average over approximately three years.
Between April 1947 and April 2022, there have been 14 bear markets, ranging in length from one month to 1.7 years, and in severity from a 51.9% drop in the S&P 500 to a decline of 20.6%
The bear market from 2007 to 2009 lasted 1.3 years and sent the S&P 500 down by 51.9%.5 The U.S. economy had slipped into a recession in 2007, accompanied by a growing crisis in subprime mortgages, with increasing numbers of borrowers unable to meet their obligations as scheduled. This eventually snowballed into a general financial crisis by September 2008.
So what can we expect from the market this time? It's hard to predict the outcome of any particular event when so many variables can affect t the outcome, especially over lengthy timespans.
As much as I would hate to see it, the above graphic depicts what a rejection and contuation of bearish sentiment could look like in AMC until late 2024 early 2025, when hopefully we get a president the public can generally agree upon and get behind. How I long for the glory days when investor sentiment was high and days were green more often than not.
Personally, I see it as a really great buying opportunity and if it does continue, I guess the silver lining would be that I was able to take that time and scoop up a shitload of discounted shares from numerous companies.
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