On Friday October 5th, Bloomberg reported that Stifel Nicholas’ institutional equities strategist Barry Bannister predicted that the S&P 500 will be in a bear market by the end of the first quarter of 2019. Mr. Bannister in late January 2018, was the analyst who predicted a minimum market correction of 5% for the first quarter of 2018. By the middle of February, the S&P 500 subsequently fell by 10%. He also advised the firm’s clients to stay the course after the correction arrived.
Mr. Bannister has a track record for making accurate long-term forecasts. In 2017, he predicted that the market would go to new highs in 2018 and that a bear market would begin in 2019.
Mr. Bannister predicts that the S&P 500 will decline to 2283 by the end of February 2019. From its October 5, 2018 close of 2885, the decline would be this would equate to a decl602 point e decline for the S&P 500 This would be a 20% correction and a decline of 602 points for the S&P 500. Bannister also predicts that the returns for the S&P 500 over the next 10 years will be in the low single digits.
Similar to myself, Bannister uses math when making his predictions. Mr. Bannister uses two ratios including professor and Nobel Laureate Robert Shiller’s cycle adjusted P/E which is also known as the CAPE ratio. His second is the Q ratio which is the market cap and debt of a company divided by its hard book value.
My math says that the S&P 500 will decline by at least 60% from peak to trough. I am also predicting that it will be 2030 before the S&P 500 is able to eclipse the high- water mark for the bull market which began in 2009.
To understand my math and also the bear market and recession investing strategies that I am recommending from now through 2030, watch my recently taped two-part interview about the “Day of Reckoning Approaching for the market” which will air on the Fox Business Channel during the second half of October. A private and pre-screening of my interview is exclusively available to alert subscribers. Click here to subscribe to BullsNBears.com for free alerts.