Russell Napier’s 2006 book, Anatomy of the Bear, is not exactly beach reading,but he does a great job pinpointing the factors in play at those moments when secular bear markets end and secular bulls begin.
The inflection points Napier describes — when bear turns to bull — are in 1921, 1932, 1949 and 1982. And based on those previous market cycles, Napier’s book projected the next turn would come in 2014 — next year. (Which lines up with the 14½-year average for secular bear markets.) Napier did not project a date… but he did say for the market to reach valuation levels equal to those earlier turning points, the S&P 500 index — currently above 1,500 — would crash to 450. Ouch, that implies a Dow in the neighborhood of 5,000 — in line with David Rosenberg’s forecast....more