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It's a V-Shaped Rally and It's Only Half-Way Done, Fisher Says

Posted Sep 17, 2009 07:30am EDT by Aaron Task in Investing
Related: ^DJI, ^GSPC, SPY, DIA, QQQQ, ^IXIC, ACWI
Stocks jumped again Wednesday, leaving major averages at their highs since early October 2008. With the Dow up eight of the last nine trading days and the S&P well more than 50% off its March lows, there's a lot of talk about the market become overextended, even frothy.

Not by a long shot, according to Ken Fisher, best-selling author and CEO of Fisher Investments, which manages about $35 billion.

Based on past history of bear markets, Fisher says the current rally is only about 50% done in terms of duration, although the steepest part of the advance has probably already occurred.

In sum, he believes in the V-shaped recovery - for the stock market: "The beginnings of bear markets are about fundamentals. The back part [is] nothing but panic," Fisher says. "The rate of descent on the downside actually gives you the rate of ascent on the upside. It's an almost perfect V [and] that ‘V' runs for fully a year, always."

That's encouraging for those who feel like it's too late to get in on the rally, and great news for those smart or lucky enough to buy at the bottom in March. It may, however, prove cold comfort for those who stayed long through the depths of the bear market; to his credit, Fisher freely admits in the accompanying clip that he didn't anticipate the unrest which began a year ago this week, and was too bullish in the latter half of 2008/early 2009.

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