Question 1

What is a bull market?

Accepted Answer

A sustained rise in a major equity index, conventionally measured from the bottom of the previous bear market to the top of the next one. The clean definition is a 20% rally off the prior low that holds, mirrored against the 20% drop that defines a bear. The number is a convention, not a law of physics. What it actually marks is the regime shift from a market that punishes you for owning stocks to one that pays you for it. Since 1950 the S&P 500 has run eleven of these, counting the one you are in right now. They show up roughly once a decade, last about four years on the median, and are the entire reason buying and holding the index works as a strategy. Without them, the math collapses.

Question 2

How long do bull markets last?

Accepted Answer

Longer than the bear that preceded them, almost every time. The median S&P 500 bull since 1950 runs about 50 months and gains about 100%. The bear that ended just before it ran about 15 months and dropped about 33%. That asymmetry is the whole game. Stocks go up most of the time and down some of the time, and the up periods are larger and longer than the down periods. The 1987 to 2000 bull ran 147 months and gained 582%. The 2009 to 2020 bull ran 131 months and gained 400%. The current run is 42 months in. Bulls do not die of old age. They die of recessions, Fed tightening cycles, and shocks no one had on the bingo card.

Question 3

What causes a bull market?

Accepted Answer

Three ingredients, usually together. One, earnings actually grow, because the economy is expanding and companies are selling more stuff at higher margins. Two, the Fed is either cutting rates or sitting still, which keeps the discount rate on those future earnings low and the multiple on stocks high. Three, sentiment turns from bracing for the worst to extrapolating the best, which compresses risk premia and lifts every multiple in the market. The 2009 to 2020 bull was all three at once: a slow earnings recovery, a decade of zero rates, and a sentiment arc that went from financial-crisis trauma to peak optimism. The 1982 to 1987 bull was the same recipe, faster.

Question 4

What is the longest bull market in history?

Accepted Answer

December 1987 to March 2000, by the standard count. The S&P 500 rose 582% over 147 months, which is more than twelve years of mostly-up tape with only a couple of brief scares along the way. The 1990 oil-price spike and the 1998 Long-Term Capital blow-up both came and went without producing a 20% drawdown that stuck. The run ended when the dot-com multiple expansion finally ate itself in March 2000. The runner-up is March 2009 to February 2020, the post-financial-crisis bull, which ran 131 months and gained 400% before the pandemic ended it in a single month. By the time you read this, the current run from October 2022 will need to last another nine years to threaten the record.

Question 5

How to tell if a bull market is ending?

Accepted Answer

You can not tell, which is the honest answer and the one nobody wants. The signals that have flagged past tops in retrospect, an inverted yield curve, narrowing breadth, a Fed that has tightened past neutral, credit spreads widening from a low base, all show up in plenty of years that did not end in a bear market. The signal that matters most is the one you only see after the fact, which is earnings actually rolling over. What you can do is notice when the conditions that powered the bull are reversing. The Fed is tightening, valuations are stretched, the marginal buyer is leveraged, and the new highs are being made by fewer and fewer names. None of that tells you when. It tells you the price of staying long is going up.


Oct 1957	Dec 1961	+86.4%	50
Jun 1962	Feb 1966	+79.8%	44
Oct 1966	Nov 1968	+48.0%	26
May 1970	Jan 1973	+73.5%	32
Oct 1974	Nov 1980	+125.6%	74
Aug 1982	Aug 1987	+229.0%	60
Dec 1987	Mar 2000	+582.1%	147
Oct 2002	Oct 2007	+101.5%	60
Mar 2009	Feb 2020	+400.5%	131
Mar 2020	Jan 2022	+114.4%	22
Oct 2022 → ongoing	ongoing	+78.0%	42

The bull market, charted.

Bull markets, answered.

The bull market, charted.

Bull markets, answered.

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