
In "The Little Book of Bull's Eye Investing," financial guru John Mauldin reveals how to profit in secular bear markets that can last 20 years. Endorsed by economist David Rosenberg, this contrarian guide challenges buy-and-hold dogma with a provocative question: what if high valuations guarantee poor returns?
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Imagine being a duck hunter standing at the edge of a lake. If you aim directly at the duck, you'll miss every time. Success requires anticipating where the duck will be when your shot arrives. This hunting wisdom perfectly captures the essence of Bull's Eye Investing. Markets move in predictable cycles, not straight lines, yet Wall Street consistently pushes the same message: "Buy stocks now, don't time markets, hold for the long term." This advice has been wrong about half the time throughout market history. We're currently in a secular bear market that began in 2000. These typically last 13-20 years, with stock prices fluctuating but making little upward progress. What's fascinating is that market cycles show no reliable connection to economic performance. From 1964-1981, the Dow gained just 0.1% while GDP grew 374%. Similarly, from 1930-1950, the economy doubled yet stocks ended flat. Michael Alexander's research demonstrates that during bear market cycles throughout history, investors achieved only 0.3% annual returns, compared to 13.2% during bull markets. His price-to-resources ratio shows that valuations at the time of investment determine returns over the next 10-20 years. The key insight: in secular bear markets, focus on absolute returns (beating Treasury bills) rather than relative returns (beating market averages).
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