worth noting
January 7th, 2008 by 
..byxbee
From John Hussman
On the issue of whether the recent correction removes any further potential for market weakness, Jim Stack of Investech notes that prolonged correction-less periods have generally been resolved by much deeper losses than 10%. At 55 months, the period since 2003 has been the second-longest stretch in 80 years without a 10% correction. The record was the 84-month period during the 1990’s. Though that instance ultimately led to a series of 10-18% corrections between 1997 and 2000 before the market finally dropped in half, the other most prolonged periods (40 months from Oct 1962 – Feb 1966, and 37 months from Jul 1984 – Aug 1987) were followed immediately by full bear markets.
http://www.hussmanfunds.com/wmc/wmc080107.htm
Assuming that there will be some corrections and/or bear market in 2008, will it be the series of 10-18% declines first or go straight to full bear market? SO is pretty sure it will be of the “crash” variety. Me, I’m not so sure that there won’t be “intervention” that will prop up the situation, at least temporarily. The meddling will not be able to prevent the inevitable but it will be a long drawn out affair. In that case, SO says the situation will be even worse. Better to have one big sharp correction and get it over with. Like ripping off a band-aid…
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