When the system is working properly, the way our economy works is crazy efficient. Food is grown and shipped often thousands of miles to land at the grocery store six days before it spoils. A million parts from all around the world come together in a factory in China to build a supercomputer that can fit in your pocket. We can send money to anyone, anywhere in the world, almost instantly.
But it’s not just about where the end consumer spends their money. It’s about every other step in the process along the supply chain. Take a car maker like Ford or GM. They grow and profit by building cars that people want to drive and can afford to buy. For the global stock market to fall, and never recover, it means this whole system has blown up. The economy as we know it and the world we currently live in doesn’t exist anymore.
So what happened? Well, over time, the economic system did its thing. The U.S. became the world's wealthiest country and largest economy, and the natural progression from there was that U.S. companies became the biggest and most powerful on earth. When the Dotcom bubble popped in 2000, the Nasdaq collapsed 77% and in 2008 the subprime mortgage crisis sent the S&P 500 down 57%. In 2020, the Covid-19 pandemic gave the market a swift kick and dropped it by 34%, practically overnight.In fact, the average length of a bear market for the S&P 500 is. That’s not a typo. Just over 9 months and the average bear market is done. Finished. Not only that, but once the market turns around, the average bull market runs for 991 days, or 2.7 years.
So there you go, the bear market will end, based on the historical average, in the Fall and the good times will be back by Christmas. Commodity prices, including crude oil, have also started to come down. This probably won’t flow through to consumers for a while, but it could be a sign that inflation figures are due to start coming back down to earth. Elon Musk even tweeted about it, so it must be true.
Right now there are many stocks that are cheap. Amazon’s business hasn’t fundamentally changed even though the stock is almost 30% cheaper than was in 2021. Neither has Apple’s, Microsofts, Goldman Sachs, Nvidia or many of the other companies in the S&P 500.
Qai_Invest How long was the longest ?