“This is one tough market to keep down,” FusionIQ CEO Barry Ritholtz opines. “But I want to reiterate that I do not believe that this is Mr. Market anticipating a full economic recovery.”
Interesting comments from Ritholtz, especially since the Dow’s up 53% and S&P 500′s skyrocketed 61% off the early-March lows.
He believes the stock market over the last few years can be separated into two phases: pre- and post-Lehman. From late October 2007 to early September 2008 – pre-Lehman – a typical recessionary bear market took place as the Dow dropped from 14200 to 115000, a 19% drop.
But post-Lehman – from September 2008 to early March 2009 – many folks believed the financial system was collapsing. That fear sent the Dow down from 11500 to 6500, or a 44% plunge in just six months.
Since then, however, the index’s recovered much of its losses, with Dow 10000 on the horizon.
“I believe – or at least rationalize after the fact – that the rally off of the lows reflects the unwinding of that 5000-point anticipation of Armageddon,” Ritholtz says.