Recently, I read an article on mikeastrachan's blogs that “Leading economist in the US market claims that the US stock market has the potential to rise over 50% in the next couple of years. He recommends buying options, or to be fully invested in stocks but buy protection through out of the money put options, for example S&P puts. Is it
true?
Source: The US Stock Market Wants to Go Up: Part II
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does something have the potential to? Sure it does. Will it? If the dollar devalues massively and the multinationals keep their trade going, but i dont see it personally.
i think so hhh~
I would call it unlikely:
The market tends to go in 35-40-year cycles with about 15-20 years spent in a secular bull market and 15-20 years spent in a secular bear market.
We are currently 11 years into a secular bear market. We've gotten through two recessions in it so far. In some ways, it might be fair to compare our current situation with 1976. 1976 lived through two recessions in the secular bear market- the second one preceded by high oil prices. Sound familiar?
If you look at the chart, the thought of a 50% stock market boost even with 5-10% inflation looks out of the question. Things could change if we get hyperinflation, but I think the DJI is going to be range-bound between 6000 and 14000 for at least five more years. We could see a 50% jump after that.
I do hold some long-term SPY calls, but as a hyperinflation hedge- they're ridiculously cheap compared to calls on precious metals.
What do you mean that we're 11yrs into a secular bear market? If anything, I would've said it was the opposite. 2010-2021 was in insane run
This was posted in 2010
....that makes sense. No idea why but this popped up to the top of the feed
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