Working Money: Money Management  |  APR 2003

Working Money: Why Doesn’t The Fat Lady Sing? by Bruce R. Faber

Working Money: Why Doesn’t The Fat Lady Sing? by Bruce R. Faber When the stage is obscured by smoke and mirrors, how can you know when the last act is finally over? Even though the bear market has been eating investors’ lunch since early in 2000, there has been no sign of the capitulation that usually accompanies a market bottom. As I write this (December 30, 2002), the Nasdaq is down about 73% from its March 2000 high of 5048. The Standard & Poor’s 500 index is down from 1527 to about 880. The Dow Jones Industrial Average (DJIA) has suffered the least, but it is still down about 29% from its peak in January 2000 at almost 11,723. In spite of the terrorist attacks in September 2001, there have been some substantial bear market rallies since the markets’ fall began. The timing and the strength of these rallies have been curious, to say the least. Maybe one of these unexplained rallies will start us back to new highs. Perhaps this time it really will be different. Who knows what’s possible?

by Bruce R. Faber