Sizing Up this Bull Market

Dubbed the “least loved bull market of all time,” Mr. Marshall sizes up how this bull-run compares with its peers and looks at the road ahead.

04.01.2017 - Giles Marshall, Vice President, Portfolio Manager,

Sizing Up this Bull Market

As memories of the 2007-2009 financial crisis fade, we find ourselves in year eight of what has been dubbed “the least loved bull market of all time.” At this point, we think it is worth quantifying how this bull market compares and taking a glimpse at the road ahead.

S&P 500 Index (US$) data since 1900 suggests there have been five long-term bull markets. So far, the current bull market is the third longest in history, matching that of 1921-1928. The two longest bull markets lasted 24 years (1942-1965) and 18 years (1982-1999)1. In terms of magnitude, the two longest bull markets also produced the strongest returns, rising 955% and 1,099%, respectively. As of February 28, this bull market has enjoyed a total return of 310%2.

Though various factors have driven the five bull markets, they do share three factors in common. First, ach has occurred against a backdrop of falling or stable inflation. Second, almost all started when the S&P 500 Index was trading at an attractive valuation level. In four of the five cases, the trailing Price/Earnings (P/E) ratio of the Index was around 10 or lower3. The current bull market is the exception, having begun on March 9, 2009, with a meaningfully higher trailing P/E ratio of 13.84. Finally, in all five bull markets the P/E ratio has risen significantly. In every case it exceeded 20.0 at its peak and, in 1999, at the height of the technology bubble, the P/E ratio exceeded a staggering 45.05. Today, the trailing P/E ratio on the S&P 500 Index is 20.3, edging the potential 20.0 danger zone where other bull markets have ended6. However, with continued low inflation and better earnings growth, we think this bull market could certainly continue for a while.


1. Ed Easterling, “Understanding Secular Stock Market Cycles,” Crestmont Research, October 6, 2016,
2. “S&P 500 cumulative price return between March 6, 2009 and February 28, 2017,” FactSet, March 1, 2017.
3. “Definition of price/earnings ratio…. The price/earnings (P/E) ratio links the stock/share price of a company with the earnings per share (profit for the year divided by number of outstanding shares),” Financial Times Lexicon,
4. S&P 500 valuation metrics, Bloomberg, March 1, 2017,
5. Easterling, “Understanding Secular Stock Market Cycles.”
6. S&P 500 valuation metrics, Bloomberg, March 1, 2017,


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