The Making of a Market Guru: Forbes Presents 25 Years of Ken Fisher

Chapter 18. 2001: Bear Market!

"You want a nice domestic telltale that shows how things are trending? Read the media and talk to your friends — and you'll discover that an ingredient for a bull market is missing: There is no wall of worry, the fear (misplaced or real) that a recovering market can't last. All bull markets must climb this wall. Although we have plenty of nasty news surrounding us, the prevalent US outlook is that the worst is over and good times are in reach."

—"The Lone Ranger," July 23, 2001

"This lingering optimism causes some to misread my past epistles, recasting them into reasons for sudden bullishness. Nothing I've written suggests that we can look forward to a bull market immediately. The difference between a few months from now and immediately can feel near infinite as the last leg of a bear market warps our perceptions."

—"Wacky Forecasts," November 12, 2001

Two thousand was a bad year for the market, but the downturn in the S&P 500 didn't really begin until September. In fact, the S&P was down less than 2 percent for the year as October ended.^[71] But by year-end, the downturn was gaining steam, and Ken was turning bearish. "I'm outright bearish for the first time in a decade, as I said in my last column. Get ready: The bumps will be brutal ahead. I've never minded giving up the first 10% in a bear market because, after all, we suffer 10% corrections regularly within normal bull markets. But bear markets don't get easier as they progress. The latter stages ...