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Markets are going higher in time.

Wednesday, April 28, 2010

In a couple of earlier posts, I mentioned that I believe the bull market we are experiencing is a cyclical bull market and that we are actually still caught in a secular bear market.  This means that the previous high set in the markets would not be bested.  So, we have to be careful once markets start testing those old highs.  A quick check against the charts would tell us that we are nowhere near those highs yet.

However, since the lows of March 2009, the markets have recovered tremendously.  The much anticipated correction has been elusive thus far but it will come and it is only a matter of time.  In such a correction, it would be an opportune time to load up on quality stocks for the next leg up. 

I would advise anyone who would like to make some money in the stock market to start drawing up a list of stocks which he or she would like to own for the rest of the cyclical bull.  Then, load up during the correction.  Buy on weakness.

We should not be overly bullish or bearish.  We should not be stubbornly holding on to any position.  I believe in being a pragmatist.  Good luck!

Related posts:

"Don't Fight the Tape," Jon Markman Says:
Classic Advice That's "Very Relevant" Today
Posted Apr 26, 2010 03:27pm EDT by Aaron Task

Bullish Sentiment on the Rise:
Is It Time to Get Worried ... or Get on Board?
Posted Apr 27, 2010 08:15am EDT by Aaron Task


Anonymous said...

hi AK,

everyday i look at the market & believe that we are still caught in a secular bear market. i read your blog daily & am glad that u share the same thoughts, kind of a reaffirmation. i am still a new learner.

there are "small" money to make in the short run looking at the volitality but if we want to make BIG $$$ . . . i hv a gut feeling that we will hit the bull market in 2012, which is concidentally the "dooms year"! slowly pick up stocks with sound fundamentals as most are still severely undervalued.

the trick is "PATIENCE" & "GUTs" !!!

KM (formerly one of the Anonymous)

AK71 said...

Hi KM,

This is much nicer for me than saying "Hi Anonymous". :)

Yes, we are still in a secular bear market but this cyclical bull has some way to run (and I am sure that the governments around the world will make sure that this happens).

The next crisis is likely to be a currency crisis and we are seeing precursors of this in Europe now. How will the mess be cleaned up in the Western world? I do not know but something will give and when it does, it will be ugly.

This cyclical bull will end and we will have another recession. Perhaps, by then, Asia will be more insulated as Asian countries build up their domestic demand but countries like Singapore which are nett exporters will still be hit badly. The stock market will suffer and there will be bargains galore once more.

Yes, you have identified two important attributes of a successful investor: patience and guts. :)

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