Kenneth Fisher says the current correction is “the most textbook perfect” one he’s seen in 12 years, and says the second leg of a bull market is coming.
Fisher writes in his latest Forbes column that the last correction that was this textbook was the 1998 correction, which was fueled by the Asian contagion, the Russian ruble crisis and the Long-Term Capital Management hedge fund debacle. ” Like that one, this year’s minicrash had been pushed along by several scary stories that turned out to be nonsense but were nonetheless impossible to dispel,” Fisher writes, citing the PIIGS debt “hysteria” as a major example.
A double-dip recession is extremely rare — and “simply inconsistent” with the strong earnings data coming from Corporate America, Fisher adds. “Why do so many fear something that has pretty much never happened?” he asks. “Because we always do that early in a big bull market after a huge bear market. At some later point false fears are seen as that. At that point the rebound will resume.”
Click here to read the full column, which includes several of Fisher’s stock picks.