It took from the spring of 1997 to March of 2000 for the SPX to go from770 to its all time high. It took until mid 2007 for it to get back towhere it ended in March 2000. This must be some kind of idiot argument,though I hate to throw around words. We are going to be closer to the1997 price before we make any kind level that will make it worthwhilebeing bullish going forward. The bulls can point to roughly 100% gainedin 10 years on the indexes as evidence they are right, but they cannotduck the issue that we are in a financial bubble that has culminated inthe greatest financial crisis in history. This is a bigger financialcrisis than 1929, 1907, 1837 and I think somewhere around 1876. Youcan't do much about AAPL, GOOG, RIMM and others. All they are is theDELL's, YHOO's and QCOM's of this move. When this bull is over, whichit may already be, holding these 3 will be like having held used toiletpaper for future sale.

There was a roughly 7000 point move inthe Dow. Almost the entire amount was next to impossible to gainwithout being 100%, constantly invested. That meant you had to endurethe decline from 2000, spend a fortune rebalancing your portfolio (noneof the other indexes are near the Dow, the Nasdaq having shown a 50%loss from its 2000 peak: put that in your bull pipe)and after brokeragefees on about 800 trades you would be here almost 8 years later with a$1500 gain on a $11,700 investment. Don't mention dividends unless youwant to also mention the rate of inflation in the meantime and thereturn on CD's to compare. The SPX got you zero.

If you wantto go back 10 years and compare, then compare to the 30 year treasuryrate if you want to buy and hold. April 1, 1997 the 30 year treasuryhad a yield of 7.09% according to Federal Reserve data. 20 year rateswere 4.71% on December 14, 2007. I'm not going to price that, but Iventure it would be in the 135 range based on par for 1997. This isimportant because it is low capital rates that have supported themarket and the comparative rate is the risk free rate when guaging thereturn of any asset.

My point is the bears have been right. Ifyou examine that 30 year treasury and realize you earned 10% fromholding it and about 9% from holding stocks, then you might begin torealize that buying treasuries long term during the mania wasn't toobad an idea. The bull can say, go back to 1980. Well, 1980 a 30 yeartreasury had a yield as high as 12% and it was 14% in 1981 and doubledigits almost the entire 1980's. One would have to get to theGreenspan/Rubin coins in the fusebox era of the 1990's before stockseven began to compare.

The bulls can always point around theindexes and bring up AAPL, MSFT, DELL and all the other bull darlings,then imagine they sold at every major peak and bought at every majorbottom, but they can only point out a few guys that really did worth adamn over the decades, the Buffetts and a few others. Most of them getbutchered.

My point of being a bear is that the bulls like touse history to promote stocks, but the history is based on something ofa reasonable valuation. History never produced a market where themarket was priced according to the most expensive group of stocks as aportfolio. The bulls have made a mistake of mistaking the market as aportfolio and holding it regardless of valuations. The market is soldas the market and as a result the high flyers produce spectacularreturn not because of their value, but because they have to be held inthe portfolio. The market has never had a dividend yield under 3% formore than a few months at a time, now for well over a decade. Themarket never had a 20 something PE for very long and 17 was alwaysconsidered sky high, not low as it is now. The market only had a Fedthat bailed it out over and over again in the 1920's and we know whathappened then. The market never had so many inexperienced and overpaidpeople running it (average GS salary over $600,000, includingclerical?). The world hasn't had rational valuations since theaftermath of the 1987 crash, when a lot of these Ivy League WallStreeters were in third grade.

I'm bearish because aninvestment involves buying something and putting it away because itsvalue indicates you can do that. What you are talking about is gettinginto assets and sweating your ass off trying to make a gain. I couldbuy the SPX with a 4% to 5% dividend, knowing I was likely to do betterthan the bonds the companies issue (stocks didn't beat treasuries overthe past 10 years, how do you think they did against their own debt?).Go back to any period of time and mark the SPX to a 3% dividend fromwhen it ever hit a 3% dividend and then blow the academic smoke aboutowning stocks. They eventually get pretty ugly against inflation andother assets once they become fairly valued. This nonsense beingparaded around today is nothing but an echo bubble of 2000, inflatedoff $5 trillion of consumer spending out of inflated real estate.