NEW YORK: Youve probably heard: its the longest bull market ever.
Youve probably also heard: no it isnt.
Whats the storyAccording to a loose consensus, bull markets are rallies that go beyond 20% and are never interrupted by a 20% fall.
In many corners of Wall Street, that means the SP 500 rally that began in March 2009 is about to surpass all that went before.Heres the issue: these definitions arent chiseled in stone.
Theyre not laws of nature -- its not even totally clear where they come from.
The 20% threshold strikes people as arbitrary, spurious, an invention.
Pundits disagree on everything from the role of psychology in defining market eras to how strict you should be about the parameters for past ones.
Several objections pertain to measurement.
One is how to date the rally this one supposedly supplants -- the dot-com bubble.
Traditionally, statisticians have placed the start of the tech rally in October 1990, the bottom of a slide in the SP 500 that got very close to 20% but not all the way.
If you refuse to call that 19.92% drop a 20% drop, the advance gets longer, and todays would need a thousand more days to exceed it.If you round the data, youre going to get a certain number of bull markets.
If you dont round, youre going to get a different number, Justin Walters, cofounder of Bespoke Investment Group LLC, said by phone.
If you want to do that, thats fine, but its not using the standard 20% definition.Sceptics have issues with bull market measurement, meaning.When a tradition coalesces on Wall Street, its hard to dislodge.
The best argument for considering 1990 a break in a bull run is probably that much of the old guard considers it so.
Different researchers give different verdicts -- sometimes at the same shop.
For better or worse, those eight 100ths of a point have been glossed over by history, leaving the 1990s run to begin in 1990.Another analytical point: Who cares Equities have been in good shape for years -- maybe leave it at that.
The stock market isnt a geometry project, skeptics note, its a tool for capital formation, something people depend on for retirement.
What difference does it make if the chart hews to a pattern in which declines of 20.1% matter and 19.9% dontLongest Market Rally in HistoryWe like records, we like round numbers, its a concept we like to talk about and tweet about, Charlie Bilello, director of research at Pension Partners LLC, said by phone.
But no one in his right mind would use this as an investment strategy.Another issue pertains to the custom of dating bull markets from trough to peak.
Accordingly, since the SP 500 was higher in January than it is now, its possible the bull market ended then.
Sure, stocks are a lot closer to highs at the moment than they are to a 20% decline.
But who knowsHeres a rundown of other ways that people say 3,452 days without a 20% decline do not a bull market make.WHERE TO STARTIts been nine years, five months and 12 days since the SP 500 hit a 13-year low on March 9, 2009, the date considered by many to be the start of the equity recovery.
Not so fast, say skeptics.
According to them, a bull market begins not when the stocks reach a bottom, but after an interval of recovery --like when the market breaches its previous high.
Viewed like this, the bull market started on February 19, 2013, when the SP surpassed an October 2007 high.I will not be popping the champagne for the bull market on August 22, said Jeffrey Hirsch, editor of the Stock Traders Almanac.
Everyones hung up on the record.
Its more nuanced than that.