Hard to believe, but five whole years have passed since the market set what now appears to be a generational low. In March of 2009, the Standard & Poor’s 500 index cratered to the ominous level of 666, handing Wall Street its second-biggest bear market of the past 100 years (only the bread-lined days of 1929 to 1932 clocked a worse peak-to-trough performance). That is especially whiplashing: It took just 17 months from late 2007 to the spring of 2009 for the market to collapse 57 percent. By comparison, the post dot-com bust at the start of that decade took nearly twice as long to inflict that kind of loss.
In the five years since the most recent bottom, the market has very nearly tripled, shrugging off various scares out of Greece, the Mideast, Washington, pink slime, Sony, MF Global, and the central banks of the U.S., Europe, and China. “This remarkable bull market in equities has been built on liquidity and pessimism, not on growth and optimism,” argues Bank of America Merrill Lynch Chief Investment Strategist Michael Hartnett in a note to clients this week.