Sunday, November 30, 2008

Five Wonderful Days

No, I'm not talking about our Thanksgiving break.

It is generally accepted that during the depths of a bear market, most amateur market participants have ceased liking the market, moved past hating the market and are so worn out that they cease caring. In this environment, stocks can have breathtaking up moves with nobody seeming to notice.

In the five days ending Friday, the S&P 500 rose 19.1%. That's a big move and I haven't heard anyone outside of CNBC mention it. In fact, when I was having lunch yesterday a bartender who kind of knows what I do went out of his way to mention how bad the market is.

I'm not saying that the bottom is in. I am saying that long-term investors can't afford to miss too many 20% moves. Unfortunately, the next 10% is more likely down than up.

Up is still good.

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