These are the words Brian Belski, BMO Capital Markets Strategist, one of the four panel members interviewed by Maria Bartiromo yesterday (10/22/13) on CNBC’s “Closing Bell.” The clip, ‘Forced into the game’ of buying U.S. stocks,’ features along with Belski: the man who turned GE into a lean, mean finance company, former CEO, Jack Welch; David MacEwen, Sr. VP, Chief Investment Officer–fixed income, American Century Funds; and RBC Capital Markets option expert, Amy Wu. All made points favorable to buying equities with Belski’s “Secular Bull Market” comment icing the cake.
The bond guy makes a KEY observation!
When asked about whether his firm was seeing clients selling bond funds and buying stock funds, David MacEwen replied ,”yes,” but went on to explain many were just putting the cash into money market investments. This is very important as it continues to indicate fear and distrusts of the stock market. Regardless of the move we’ve had in the market, there appears to be many converts yet to be made to the ‘bull case.’ This fear and negativity are very positive.
“Secular Bull Market” talk, too much of a good thing.
Brian Belski is not the only voice out here calling for a secular bull. My old colleague at Kidder, Peabody, Ralph Accampora in this clip, is thinking along the same line.
When we talk about “secular bull markets,” we are talking about markets that might run on the upside for 10 or 15 years. During these long term bull moves you can have very severe cyclical downturns. We saw this in the 1980s after the market had run from DOW 1000 in 1982 to 2722 in the spring of 1987. By October of 1987 the Dow had fallen almost 1000 points (a cyclical bear) to 1739 (avery large portion of this decline in just a few days). Many swore off stocks. By 2000 the Dow had risen to 10,000.
The point we make hear is that the greater the ‘happy talk’ about the market, the more likely we get that shot across the bow from one of these cyclical downs. This will be scary, but I believe it will not be the end of the road.
What do you think?
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