Current Secular Bear Market Is Not Over History Should Be Our Guide

One of the main features of the easy money economy of the Roaring Twenties was that investors could take advantage of investment margin leverage of 90%. This leverage was the fundamental reason behind the sharp run up in stocks, and this leverage left investors susceptible to market selloffs, which would come to pass in later years. All secular bears start by a triggering event that begins the de-leveraging process of the previous growth cycle. The Roaring Twenties, stock market crash and subsequent depression is a perfect example of this.

 

Similarly, today personal and government debt has once again become a major concern. Included in this is the recent growth in margin debt which illustrates how current personal debt is now exceeding debt levels seen prior to the 2008 fiscal collapse. Since the early 1970’s debt has escalated at a pace like we have never seen before in history.

 

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About Ziad K Abdelnour

Ziad K. Abdelnour is President & CEO of Blackhawk Partners, Inc., a New York based private equity ”family office” that focuses on originating, structuring, advising and acting as equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations, buildups, and growth capital financing's in companies and projects based both in the US and emerging markets.