MARKETS

After 12 years of volatility and disappointment, stocks might be starting the next leg up. And the widespread fear and distrust might only fuel the rally more, writes MoneyShow's Howard R. Gold, also of The Independent Agenda.

As some major market indexes have moved closer to their all-time highs, several market gurus are starting to think the unthinkable: We may be entering a new secular bull market.

That’s a bull market that could take the averages much, much higher over several years. Think 1982 to 2000. It would mean a definitive end to the secular bear market that has haunted us since 2000, producing a “lost decade” and maybe a lost generation of investors.

And if you’re shaking your heads in disbelief, that only clinches it for these bulls: Your doubt and downright hostility toward stocks is building a wall of worry like the chamber of molten rock and magma that grows and grows before a volcano explodes.

Two of the three I spoke with—Mark Arbeter of Standard & Poor’s Capital IQ and Craig Johnson of Piper Jaffray—are technicians. The third, Jim Paulsen of Wells Capital Management, is a fundamentally oriented bull of long standing. But they all believe we could be on the verge of a major move higher.

“The technical conditions are ripe for the end to the secular bear and a new secular bull emerging,” Arbeter told me.

“This is not a one-year or two-year run. This is a multiple-year run,” said Johnson, who thinks stocks are poised to hit all-time highs soon.

“I think it’s going to be a multiyear recovery,” agreed Paulsen. Why? Because the fundamentals are better than most people believe.

“I think the great bulk of this move has been about fundamentals rather than the [Federal Reserve],” he told me. “I think the economy has begun to reaccelerate.” He reeled off stat after stat to back that up:

  • this year, unemployment has declined at the fastest rate since the recovery began
  • individuals are re-entering the labor force in ever-greater numbers
  • consumer confidence has hit a five-year high
  • automobile sales are surging
  • housing is beginning to recover
  • bank lending is picking up

“In many ways, the US recovery is gearing on more cylinders than ever,” he wrote recently. “Its character today is far more mature, more broadly based, and therefore far less vulnerable to external shocks than at any time since the recession ended.”

He also said the current stock-market rally, which began in March 2009 and has taken the S&P 500 120% higher, is the "best-performing stock market recovery cycle of the entire postwar era”—and yet at around 14 times 2012 estimated earnings, the S&P 500 is still relatively cheap.

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