In just over a month, the S&P 500 fell 34%.* Does this mean that the bull market is over?
On the one hand, this alone should be enough to render the bull market dead, on the other, stocks also fell 34% in 1987 and yet you never hear people talk about the bull market of 1982-1987 and the bull market of 1987-2000. They talk about the bull market of 1982-2000.
Black Monday did not reset the bull market because in just under two years stocks had taken back all those losses and made new highs.
If the 34% decline isn’t enough to end the bull market, what about a recession? Not necessarily.
There was a shallow eight month recession in 1990 that took nearly 20% off the S&P 500. It was but a blip on the butt of the bull.
Why do labels even matter, you might be wondering. They wonder to the extent that the media influences investor behavior. Talking about the end of the bull or the beginning of a bear at some level changes market dynamics. How much is impossible to say.
I say the bull market is dead. That doesn’t mean it can’t come back to life, but considering that stocks fell 34% and a recession is likely, it’s hard to say we’re still in a bull market.
Barry and I chop it up in this video, check it out.
*Using closing prices
