By: Steve Smith
With the S&P 500 climbing back within 1% of the all-time highs, this bull market is not only second-largest in terms of percentage gains but closing in as one the longest in terms of days. The current market news is heartening, to say the least.
In just 12 trading days, the S&P 500 bull market becomes the longest of all-time, at 3,543 days, on August 22nd.
At least that’s according to many people that measure or consider the bull market having begun at the March 2009 low. But some people think a new bull market doesn’t commence until the old high is cleared. Which, in this case means the clock wouldn’t have started until March 2013, or a full 4 years (1460 days) later.
For my part I don’t have a strong opinion as I think like most labels for inexact concepts are just semantics.
I think for consistency’s sake, since bear markets are typically measured and quantified as a 20% decline from the peak, then the bull market would commence at the low.
For example, let’s use The Great Depression as an example. Did the bull market start at the bottom in 1932 or when new highs were made in 1954? What do call the period from the bottom to the previous high?
From the low in ’42 until the Dow finally passed its ’29 high in the end of 1954, the Dow gained 285%. It’s hard to call this anything other than a massive bull market, even if it took place within the confines of a high made years earlier.
The other, possibly more important thing to note that during this supposedly longest bull market is that from April through October 2011, the S&P 500 fell 21.6% intra-day. However, on a closing basis, it fell just 19.4%, so the ‘official’ 20% bear market isn’t being included in the tally.
There was also another period, from mid-2015 to early 2016, for which if you didn’t own a specific group of stocks —mostly bond proxy consumer staples and utilities– those 8 months felt nothing like a bull market.
This was during the period when oil slipped below the $30 per barrel level devastating anything energy related. Even some of the FANG, such as Amazon and Apple and Netflix each suffered declines of over 35%
Overall the median stock in the S&P 500 fell by 25%, and a full 127 names has declines of greater than 40%, but the overall index lost just 14.5%.
Again, broad labels and definitions can be misleading as to what is happening under the hood or what individual investors are actually experiencing.