Albert Edwards: “The equity bear market is not over.”
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December 10th, 2009 by Prieur du Plessis, Investment Postcards from Cape Town
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“The equity bear market is not over,” writes Albert Edwards, London-based strategist of Société Générale, in an article in the Financial Times.
“The valuation bear market began in 2000 and we have only seen two acts of a far longer and more disturbing play,” says Edwards. “Certainly when I see the current extremely low number of equity bears [the lowest as measured by Investors Intelligence since the market top of 2007], the likelihood is that the next leg of the long-term structural valuation bear market is closer than people realize.”
Source: The Big Picture, December 9, 2009.
Edwards highlights that, in terms of technical analysis, “the S&P is stuck close to its 50 per cent retracement level from the October 2007 peak. In addition, key indicators such as the relative strength index have been weakening on poor volume throughout the second-half rally, suggesting a lack of strong technical underpinnings.”
He also mentions that the “topping out of some key US leading indicators may signal the top of the equity rally is close” and concludes that “markets will march to a very different drumbeat next year”.
Dr. Prieur du Plessis is an investment professional with 26 years' experience in investment research and portfolio management. More than 1,200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns, including his blog, Investment Postcards from Cape Town. He has also published a book, Financial Basics: Investment. Prieur is Chairman and principal shareholder of South African-based Plexus Asset Management, which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and a number of foreign countries. He also serves as Honorary Consul of Slovenia for South Africa, actively developing economic, cultural and scientific relations between Slovenia and South Africa. Prieur is 54 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town, South Africa. His leisure activities include long-distance running, traveling, reading, motor-cycling and scripophily. Read more from the author/contributor here.
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Tags: Acts, Advertisement, Amp, Bear Market, Bears, Big Picture, Drumbeat, Edwards, Financial Times, Investors Intelligence, Leading Indicators, Likelihood, London, People Picture, Poor Volume, Rally, Relative Strength Index, Second Half, Societe Generale, Strategist, Technical UnderpinningsPosted in Markets |
