The Bear Facts

  • March 16, 2001
  • Gary Kaltbaum

Since the action of the market is
fairly evident at this point, I thought I would give you a heads up on some of the sectors that
led coming out of previous bear markets. Certainly, there were other sectors that were strong coming out of the bad
markets. I just wanted to highlight the real strength. First, the facts, then a little commentary.


1978

Technology — a little business called Personal Computers.

Late 1981 – Early 82

Retail: Lower interest rates spurred on consumer spending.

Defense: A gentleman by the name of Reagan initiated serious spending.

Financials: Lower Rates — higher financials.

After the ’87 crash

Cable: Loosening of regulations. 

Shoes: LA Gear up seventeen-fold out of the crash.


1990

Biotech: Fidelity Biotech up 90%.  A little company named Amgen goes up a
zillion fold.

HMOs – trying to control medical costs. Tons of buyouts.

Tech, tech, tech: Microsoft, Cisco, Novell start huge moves.


1994

Tech, tech, tech

Networkers 

Telcom

Software 


1998

Internet

Semiconductors

Software

Networking

Telcom

Fiberoptics

It’s not often that bear markets do not have a Medical or Tech component leading out of
them. Go figure. These are the two areas that have had the strongest growth. I suspect — and I don’t think this is a longshot — that
Tech  will lead again. I just don’t know when and which. But rest assured,
leadership will start rearing its head before the market starts ringing bells.
The next leaders will first stop correcting. They will then consolidate. After a period of
time, they will break out of trading ranges on huge volume. Then, a bunch of other names will start following like soldiers
behind their general leading to a new bull market.

Reality is that we are still a good ways away before this happens because stocks have still not found a
bottom. The Naz is showing no ability to rally here. The only sector I have been constructive on in Tech land is the
Semis  and now they look real suspect. If Semis break down from here, certainly another
leg down is just ahead.

Goran, I have never met you but I feel you are not only a friend, but kin. Any person that has the passion that you have for helping others with not only
strong opinions, but right-on-the-money opinions is aces by me. But I am still praying that
(
MO |
Quote |
Chart |
News |
PowerRating) keeps dropping. Don’t want to see that thong.

Hope everyone has a great weekend.