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Saturday, February 25, 2012

Why Doctors Die Differently?

Careers in medicine have taught them the limits of treatment and the need to plan for the end

Years ago, Charlie, a highly respected orthopedist and a mentor of mine, found a lump in his stomach. It was diagnosed as pancreatic cancer by one of the best surgeons in the country, who had developed a procedure that could triple a patient's five-year-survival odds—from 5% to 15%—albeit with a poor quality of life.
What's unusual about doctors is not how much treatment they get compared with most Americans, but how little.

Charlie, 68 years old, was uninterested. He went home the next day, closed his practice and never set foot in a hospital again. He focused on spending time with his family. Several months later, he died at home. He got no chemotherapy, radiation or surgical treatment. Medicare didn't spend much on him.
It's not something that we like to talk about, but doctors die, too. What's unusual about them is not how much treatment they get compared with most Americans, but how little. They know exactly what is going to happen, they know the choices, and they generally have access to any sort of medical care that they could want. But they tend to go serenely and gently.

Doctors don't want to die any more than anyone else does. But they usually have talked about the limits of modern medicine with their families. They want to make sure that, when the time comes, no heroic measures are taken. During their last moments, they know, for instance, that they don't want someone breaking their ribs by performing cardiopulmonary resuscitation (which is what happens when CPR is done right).
In a 2003 article, Joseph J. Gallo and others looked at what physicians want when it comes to end-of-life decisions. In a survey of 765 doctors, they found that 64% had created an advanced directive—specifying what steps should and should not be taken to save their lives should they become incapacitated. That compares to only about 20% for the general public. (As one might expect, older doctors are more likely than younger doctors to have made "arrangements," as shown in a study by Paula Lester and others.)

Why such a large gap between the decisions of doctors and patients? The case of CPR is instructive. A study by Susan Diem and others of how CPR is portrayed on TV found that it was successful in 75% of the cases and that 67% of the TV patients went home. In reality, a 2010 study of more than 95,000 cases of CPR found that only 8% of patients survived for more than one month. Of these, only about 3% could lead a mostly normal life.

Unlike previous eras, when doctors simply did what they thought was best, our system is now based on what patients choose. Physicians really try to honor their patients' wishes, but when patients ask "What would you do?," we often avoid answering. We don't want to impose our views on the vulnerable.
The result is that more people receive futile "lifesaving" care, and fewer people die at home than did, say, 60 years ago. Nursing professor Karen Kehl, in an article called "Moving Toward Peace: An Analysis of the Concept of a Good Death," ranked the attributes of a graceful death, among them: being comfortable and in control, having a sense of closure, making the most of relationships and having family involved in care. Hospitals today provide few of these qualities.

Written directives can give patients far more control over how their lives end. But while most of us accept that taxes are inescapable, death is a much harder pill to swallow, which keeps the vast majority of Americans from making proper arrangements.

It doesn't have to be that way. Several years ago, at age 60, my older cousin Torch (born at home by the light of a flashlight, or torch) had a seizure. It turned out to be the result of lung cancer that had gone to his brain. We learned that with aggressive treatment, including three to five hospital visits a week for chemotherapy, he would live perhaps four months.

Torch was no doctor, but he knew that he wanted a life of quality, not just quantity. Ultimately, he decided against any treatment and simply took pills for brain swelling. He moved in with me.
We spent the next eight months having fun together like we hadn't had in decades. We went to Disneyland, his first time, and we hung out at home. Torch was a sports nut, and he was very happy to watch sports and eat my cooking. He had no serious pain, and he remained high-spirited.

One day, he didn't wake up. He spent the next three days in a coma-like sleep and then died. The cost of his medical care for those eight months, for the one drug he was taking, was about $20.
As for me, my doctor has my choices on record. They were easy to make, as they are for most physicians. There will be no heroics, and I will go gentle into that good night. Like my mentor Charlie. Like my cousin Torch. Like so many of my fellow doctors.

—Dr. Murray is retired clinical assistant professor of family medicine at the University of Southern California. Adapted from an article originally published on Zocalo Public Square.

Size matters: blue chips recover faster

Published February 25, 2012
Show me the money

They have a greater tendency to bounce back when recovery comes while small caps fall by the wayside


THE Straits Times Index has risen by 12 per cent so far this year. At a lunch this week, a friend commented that only the blue chips or the big-cap stocks have participated in the rally so far. Many of the small-cap stocks are still in the doldrums.

I was curious as to whether that is indeed the case. So I decided to find out the prices of the stocks on the Singapore Exchange relative to their three and five-year highs and lows.

Overall, Singapore stocks are currently trading at a median 84 per cent higher than their three-year low, registered mostly in March 2009. Relative to the three-year high hit in April 2010, the median stock is still 39 per cent below that level.

For the five-year range, the median stock is 96 per cent above the March 2009 low, but also a long way from the peak reached in July 2007. The median stock is still 60 per cent below the peak reached in the last bull market.

But if we take only stocks with trading history that go back either three years or five years, then the median appreciation from the three-year low - also in March 2009 - is 94 per cent; while relative to the peaks April 2010, the median price level is still 39 per cent below that.

Between February 2007 and now, the median share price is 108 per cent above the lows in March 2009, and 65 per cent below the peaks in July 2007.

So now to the question: Is there a difference in the performance of the various segments of the market? Do all stocks perform uniformly, or is there a variation in the performance depending on the size of the companies?

In the accompanying table, I broke down the median price performance of stocks based on their market capitalisation. I grouped the stocks with market caps of $1 billion and above into one category, those between $200 million and $1 billion into another category, and those between $100 million and $200 million into yet another category. Finally, the last group would be stocks with market caps below $100 million.

The stocks were grouped based on their market caps on Feb 23, 2007 and on Feb 23, 2009 for the five- and three-year trading ranges.

From the table, you can see that the bigger the market cap of a stock, in general the better it performs relative to its three- and five-year lows and highs.

For example, for stocks with market caps of $1 billion and above, they are only 41 per cent below their five-year highs, and 13 per cent below their three-year peaks.

The smaller the stock gets, the greater the distance they are from their peaks. For stocks with market cap of $200 million to $1 billion, the median price is 58 per cent from the five-year peak.

Stocks with market cap of $100 million to $200 million have to climb 68 per cent before they reach the highs registered in July 2007. And for the micro chips, those with market caps of below $100 million, the climb is even steeper - at 72 per cent - before the previous peaks are in sight.

As for the bounce from the troughs in the last five years, again there is a strong correlation between size and the strength of the bounce.

For stocks with market caps of $1 billion and above, the median bounce from the five-year lows is 123 per cent. But stocks with market caps of $200 million to $1 billion proved a little more sprightly, with a median bounce of 128 per cent.

That's about the optimal size investors should go for if they seek growth. Any smaller, and the chances of any rebound from a crisis will be greatly diminished.

For stocks with market caps of $100 million to $200 million, the median current price levels is 110 per cent above the troughs, and for stocks smaller than that, it is 100 per cent.

The pattern is similar for the trading range over the last three years. Relative to their three-year peaks, stocks above $1 billion market cap have a median price which is only 13 per cent lower.

Those in the $200 million to $1 billion category are 32 per cent below their peaks; and those in the $100 million to $200 million category are 38 per cent from their three-year highs.

Again the micro caps are in general still very depressed, with a median price level which is 45 per cent below their recent peaks.

So what is the takeaway? For me, it is clear that size offers a safety feature that small caps don't have. Yes, during a crisis, a bear market, the likes of CapitaLand or Keppel Corp may fall along with the general market. But it is unlikely that they will lose 90 per cent of their market value as some of the smaller caps do, when their businesses are permanently impaired following a drastic change in the business environment.

And when the recovery comes, it is almost a certainty that the likes of Jardine Cycle & Carriage, and Dairy Farm will rebound back strongly. People will continue to buy cars, and they will continue to shop at Cold Storage.

Meanwhile, small caps have another obstacle working against them. Because of the sheer number of such stocks, some may get neglected even if their fundamentals are good. In circumstances like that, the sponsors are inclined to privatise the outfit and the exit price for retail investors sometimes may not even approach the fair value of the company.

So there is a tendency for good small caps to be taken out of the market, leaving the less desirable ones in the market.

On the whole, I'd say it is sounder to just stick to the established names and ride the ups and downs of the market with them.

Saturday, February 11, 2012


二月 11th, 2012 by 曹仁超















Wednesday, February 8, 2012

BlackRock CEO: Investors Should Be 100% in Equities

By Bei Hu and Susan Li - Feb 8, 2012

Investors should have 100 percent of investments in equities because of valuations and higher returns than bonds, said Laurence D. Fink, chief executive officer of BlackRock Inc. (BLK), the world’s largest money manager.

Investors who seek the safety of treasury bonds will have minimal returns and will not be able to meet their needs with the U.S. Federal Reserve expected to keep interest rates low, said Fink, who in 1988 co-founded the New York-based manager with $3.5 trillion of assets. By contrast, equities are trading at the lowest valuations in 20 or 30 years.

“I don’t have a view that the world is going to fall apart, so you need to take on more risk,” he said in an interview with Bloomberg Television in Hong Kong today. “You need to overcome all this noise. When you look at dividend returns on equities versus bond yields, to me it’s a pretty easy decision to be heavily in equities.”

The Federal Open Market Committee last month pledged they would keep borrowing costs low through at least late 2014 to boost the economy and put more Americans back to work, extending a previous end date of mid-2013. Investors pulled money from mutual funds that buy U.S. stocks for a fifth year in 2011, the longest streak in data going back to 1984, according to the Investment Company Institute in Washington.

Fink’s recommendation is at odds with investment-management guidelines that urge investors to diversify their holdings by putting 60 percent of their money in stocks and 40 percent in bonds.

Investment Guidelines
Investors tend to reduce their dependence on stocks as they get older, to cut volatility in their investments. Investors in their twenties had 73 percent of their 401(k) retirement assets in equities, while those in their sixties had 48 percent of their 401(k) assets in equities, according to research conducted by Investment Company Institute and the Employee Benefit Research Institute at year-end 2009.

Fink, who co-founded BlackRock in 1988 as mainly a fixed- income manager, was a pioneer in the mortgage industry earlier in his career at First Boston, which was later acquired by Credit Suisse Group AG. There, he traded bonds in the 1980s, and helped slice and pool mortgage bonds that were then sold to investors as collateralized mortgage obligations. About $1.25 trillion of BlackRock’s assets were in fixed-income as of Dec. 31, compared with $1.56 trillion in equities.

Stocks Versus Bonds
Fink said in a May 31 interview he’s more bullish on U.S. equities than bonds because companies are benefiting from the weak dollar and have surplus cash to invest for growth. While equities around the world were off to the best start in 18 years, the S&P 500 Index gained just 1.2 percent since Fink’s prediction last year, compared with the 6.8 percent return in Treasuries, according to Bank of America Merrill Lynch indexes.

The MSCI All-Country World Index (MXWD) rallied 5.8 percent last month, topping gains in commodities and handing investors January’s best returns in almost two decades, according to data compiled by Bloomberg. The measure, which rose 0.2 percent as of 1:38 p.m. in Hong Kong, is trading at 13.6 times earnings, less than half its valuation of 32.4 times at the end of 2009, according to the data.

Fink said the Greek debt crisis will be resolved as it’s not in anyone’s interest to have a blowup now. Greece is trying to win a 130 billion euro ($172 billion) second aid package to prevent the country’s collapse, strike a deal with private creditors and remain in the euro area. European leaders in recent days stepped up pressure on Greek politicians to meet the conditions of the rescue.

‘Very Bullish’
“I’m very bullish on the market,” he said, citing the increased liquidity from the U.S. and European central banks. “I think the market is focusing too much on noise like Greece. And yet we’re going to have a lot of volatility and we’re going to have to live with it.”

Greek Prime Minister Lucas Papademos was scheduled to meet late yesterday with representatives from the so-called troika of European Commission, the European Central Bank and the International Monetary Fund again to put final touches on terms required for the rescue package that Finance Minister Evangelos Venizelos said would determine the country’s ability to stick to its plan to remain in the euro zone.

The European Central Bank would be able to provide liquidity to stabilize the European markets this year, Fink said. In the U.S., he doesn’t see another round of quantitative easing for at least a year.

Quantitative Easing
“The only reason that I would think we would do a quantitative easing three is if the dollar gets too strong,” he said. “I think the ECB is going to bring down the value of the euro. I think the euro will break $1.20 this year.”

A weak euro is going to stimulate a recovery in parts of Europe, jeopardizing some of the U.S. economic growth, he said. The U.S. did “particularly better than our estimates” because of the weakening of the dollar, driven in part by the quantitative easing, he added.

Asked if he would become the next Treasury Secretary should President Barack Obama win re-election, Fink said: “A, it’s eight months, nine months away; we have to see if the president will be re-elected. B, we’re going to see if the president would want me. And C, I have to ask my wife would she ever let me. Put those all together, I would say it’s pretty foggy, uncertain if that would ever happen.”

Get ready for a rough ride

Published February 8, 2012

A roundtable was told last week that 'markets are far too optimistic about the global economy', reports TEH HOOI LING

ONE should still be cautious about the prospects for the Asian markets this year as there are so many political and economic flash points, with many of them threatening to reach danger points spontaneously, said Manu Bhaskaran, partner and head of economic research at Centennial Group, at a roundtable organised by CFA Singapore last week. 'It's very difficult to argue that most of these will turn out honky-dory,' he told senior members of the society who are primarily investment professionals.

Among the key political flash points in the Middle East are the Iran nuclear standoff reaching a tense point, Syria tumbling into a civil war, and Iraq's security and political stability crumbling. All these will lead to a rising risk premium in oil prices. So the price of oil will be higher than where it should be, based purely on demand and supply.

Economically, there are likely to be surprises on the downside. 'Markets are far too optimistic about the global economy,' said Mr Bhaskaran. There is a huge political drag and fiscal drag in the United States. Unless the housing market recovers far more strongly than expected, the US will deliver sub-par growth in 2012 and even worse in 2013 - the recent positive job numbers notwithstanding.

Meanwhile, the eurozone is in a completely untenable situation. 'The delicate arrangement of policies to buy time by eurozone leaders will not survive the grinding effects of a worsening recession in the region, which will trigger political and financial stresses,' he said.

In Asia, the political flash points are in North Korea, Pakistan and Malaysia. There is a greater likelihood of a troubled transition in North Korea than markets think.

In Pakistan, according to Mr Bhaskaran's assessment, there will almost certainly be a military-inspired change of government under the guise of a parliamentary manoeuvre. Violence which ebbed a little in 2011 compared to 2010 will rise again, and many parts of the country will be out of Islamabad's control. This will have huge negative implications for India.

Meanwhile, in Malaysia, investors should watch out for election risks. The baseline scenario is that Prime Minister Najib Razak may be able to contain the losses of Umno/Barisan Nasional to around 10-15 seats - which would still give him a strong majority in Parliament, although not two-thirds. But this would not be strong enough a victory to firm Mr Najib's grip on Umno, and chances are he will stumble along, unable to implement his reforms.

On the economic front, Mr Bhaskaran noted that there are some key differences between the 2008 slowdown and the current one which are not positive for Asia. First, the current slowdown is due to a combination of slower growth in global demand brought about by adjustments in the G-3 economies and ongoing financial stresses in Europe and perhaps in China.

No massive policy responses

This time around, G-3 and China are unlikely to engage in massive policy responses. Hence the slowdown will not be the relatively short one we experienced in 2008-09.

Meanwhile, the political mood in G-3 is more sour now, making them less friendly to Asian economies.

All this means that adjustment mechanisms that did not kick in in 2008-09 could kick in now - adjustments like retrenchments, an interruption in the flow of remittances from urban to rural, reduced deployment of overseas workers and a reduction in remittance flows, as well as protectionism.

On the positive side, there is expanding regional integration, reopening of Myanmar, and increased infrastructure spending across many countries.

As for China, it could be a source of unpleasant surprises. Mr Bhaskaran sees China at risk of one or two quarters of sub-par growth, accompanied by financial and political stresses. A number of imbalances and structural adjustments that have been building in recent years are unravelling just as the external slowdown hits.

Among the imbalances are: a huge monetary overhang of around 30 percentage points of GDP; speculative bubbles, of which property is only one; large debts in certain parts of the economy such as local government and SMEs; substantial growth of illegal lending; and rising wage, land and other costs.

Mr Bhaskaran is of the view that the Chinese leaders have the ability to mitigate a slowdown but not to prevent one from starting.

As for India, it is also likely to face a sharp slowdown in investment caused by tight money; worsening infrastructure bottlenecks, especially in power; and rising fiscal challenges.

Singapore will face multiple challenges this year. Its export structure is heavily geared towards the G-3 markets directly and indirectly. Its financial sector will take a hit from the cyclical downturn in financial activities as well as the longer-term definancialisation as financial activities adjust to tighter regulation, tougher capital adequacy rules and hostile politics.

At the same time, it has to deal with domestic adjustments. Wage costs are rising because of tighter rules on foreign worker inflows, office and commercial rents have continued to rise, its strengthening currency is reducing its competitiveness, and the property cooling measures will reduce real estate-related service activity as well as investment.

Deflationary adjustments

'In the scenario of a prolonged slowdown, and given that the Monetary Authority of Singapore is unlikely to allow a material nominal depreciation of the Singapore dollar, domestic costs will have to adjust down. We will have to endure deflationary adjustments as we experienced in 2001-2003,' said Mr Bhaskaran. 'This may become more evident in the later part of this year and 2013.'

Under this scenario, the Singapore government will need to use monetary and fiscal policy to tackle the situation. The April monetary policy recalibration should be a one-off nominal depreciation and a shift towards a no-appreciation policy.

On the fiscal front, there is room to accelerate infrastructure spending. A modified form of the Jobs Credit Scheme should also be implemented together with a reintroduction of support measures for credit extension to small/medium enterprises such as the risk-sharing initiative.

The roundtable ended with the participants sharing their investment ideas for this year.

Among the ideas are:

* buy China equities; improvements in liquidity and policies are enough to drive markets when valuations are at very attractive levels;

* buy blue-chip global firms listed in the US as they have been beaten down pretty hard;

* stay defensive by going for high-yielding stocks as Singapore enters into a recession;

* short euro; long precious metals; and

* invest in private equity funds.

Tuesday, February 7, 2012

Stocks Least Loved Since ’80s

By Nikolaj Gammeltoft, Inyoung Hwang and Whitney Kisling
Feb 7, 2012 1:02 AM GMT+0800 .

The Standard & Poor’s 500 Index’s best start in 25 years is doing little to restore Americans’ confidence in the stock market.

The benchmark gauge for U.S. shares has climbed 6.9 percent in 2012, the most since it rose 14 percent to begin 1987, data compiled by Bloomberg show. It traded at an average of 14.1 times earnings since the start of 2011, the lowest annual valuation since 1989. More than $469 billion has been pulled from U.S. equity mutual funds over five years and New York Stock Exchange volume slipped to the lowest since 1999.

Pessimism is taking a toll on the securities industry, where more than 200,000 jobs were lost last year, even as U.S. unemployment declines as the economy accelerates. Sentiment is the worst since the early 1980s, when 17 years of equity market stagnation gave way to the biggest rally in history.

“Investors are scared to death,” Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $370 billion, said in a telephone interview on Feb. 3. “The fears are justified, but from a valuation standpoint the market has overshot, as it typically does. We’ve been pounding the table to put money into equities.”

The Standard & Poor’s 500 Index rose 2.2 percent last week to 1,344.90 after U.S. unemployment fell to the lowest level since February 2009 and manufacturing grew at the fastest rate in seven months. The S&P 500 retreated 0.2 percent to 1,342.13 at 11:46 a.m. in New York today.

Companies whose shares dropped at least 20 percent last year helped lead the gain, with Whirlpool Corp. climbing 26 percent, Genworth Financial Inc. (GNW) rallying 17 percent and Cummins Inc. (CMI) increasing 13 percent.

Three-Year Rally
Sentiment has deteriorated even as the S&P 500 rose 99 percent since March 9, 2009. The 106 percent expansion in U.S. earnings during the last nine quarters, the most since 1987, helped fuel the rally. For the period ended Dec. 31, 67 percent of companies in the S&P 500 beat analyst profit estimates as earnings advanced 3.3 percent.

Investors pulled money from mutual funds that buy U.S. stocks for a fifth year in 2011, the longest streak in data going back to 1984, according to the Investment Company Institute in Washington. Withdrawals were $135 billion last year, the second-highest total after 2008, the ICI said.

Concern European leaders will fail to keep Greece from defaulting, the May 2010 flash crash in which $862 billion was erased from equities in less than 20 minutes and some of the most volatile markets on record last year helped spur the withdrawals. Of the more than $11.1 trillion that was wiped off U.S. shares between 2007 and 2009, $8.1 trillion has been restored.

‘Never Happened’
“The stock market has effectively doubled since the March ’09 low, and we’re still in redemption territory for equity funds,” Liz Ann Sonders, the New York-based chief investment strategist at Charles Schwab Corp., said in a Feb. 2 phone interview. Her firm has $1.7 trillion in client assets. “That’s never happened.”

Money managers haven’t kept up with the S&P 500’s advance. Hedge funds declined 5 percent in 2011, the third year of losses since 1990, according to Chicago-based Hedge Fund Research Inc. A total of 21 percent of 525 global fund categories tracked by Morningstar Inc. topped their benchmark indexes last year, the fewest since at least 1999.

‘Fear and Anxiety’
Valuations have fallen even as the S&P 500 rallied 21 percent since the end of 2009 because profits increased five times as fast. The price-earnings ratio for the benchmark gauge of American equities has fallen to 14 times reported income, down from 24 at the end of 2009. The ratio slipped as low as 10.2 at the end of the 17-month bear market in 2009, when the S&P 500 declined 57 percent.

“It was the severity and the quickness of the fall and how long it’s taking to come out of the trough that’s been adding fear and anxiety,” Warren Koontz, head of U.S. large-cap value stocks at Loomis Sayles & Co. in Boston, which manages about $160 billion, said in a telephone interview on Feb. 3. “Over time, if things continue to progress on a step-by-step basis, people will come back to stocks.”

Trading at the New York Stock Exchange declined to the lowest level since 1999 last month, with the average volume over the 50 days ending Jan. 25 slowing to 838.4 million shares, according to data compiled by Bloomberg. The value of stock changing hands dropped to $24.9 billion, a 50-day average not seen since at least 2005.

That’s contributing to a contraction on Wall Street. The number of securities professionals registered with the Financial Industry Regulatory Authority fell to 629,518 last year, the lowest end-of-year level since at least 2002.

Kaufman, WJB
At least three New York securities firms folded this year. Kaufman Bros. LP, with a staff of about 40, WJB Capital Group Inc., which had more than 100 employees, and Ticonderoga Securities LLC, with about 75, closed as trading slowed and funding evaporated.

“Institutional traders are more cautious, and the long- only investors like mutual funds, which are typically a source of demand, that money’s been coming out for the past four years,” Walter “Bucky” Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, said in a Feb. 2 phone interview.

While Wall Street retreats, U.S. employers added 243,000 non-farm jobs in January, the most in nine months. Confidence among U.S. homebuilders rose in January to the highest level since 2007, according to an index released Jan. 18 by the National Association of Home Builders and Wells Fargo & Co.

Whirlpool Rally
Among the 20 stocks in the S&P 500 with the largest gains this year, seven were among the 20 worst in 2011. Genworth, the mortgage guarantor and life insurer, has rallied 40 percent after losing 50 percent in 2011 even as earnings increased 65 percent. Analysts project the Richmond, Virginia-based company will almost triple profit in 2012.

Whirlpool in Benton Harbor, Michigan, posted the second- best gain in the S&P 500 this year as its income for the final three months of 2011 beat analyst estimates by 26 percent -- better than 92 percent of the 264 companies in the index that have reported since Jan. 9. The world’s largest maker of household appliances slid 47 percent in 2011, plummeting after July on increased concerns about the economy stalling.

A 36 percent rally in Cummins shares this year comes after the Columbus, Indiana-based maker of diesel engines lost 20 percent in 2011. While earnings beat estimates in all but the third quarter last year and no analyst recommends selling the stock, investors pushed its valuation to 9.9 times reported earnings. The price-earnings ratio surged 36 percent in 2012.

Lost Decade
Rallies have faded since 2000, when the dot-com bubble drove the Dow Jones Industrial Average to a record high. The gauge peaked at 11,722.98 that year, and has risen above and then fallen below that level seven times since. It ended at 12,862.23 on Feb. 3, up 5.3 percent so far this year.

The past decade parallels the span between Dec. 31, 1964, and the end of 1981, when the Dow added less than 1 point after surging interest rates diminished the appeal of equities. While the 115-year-old stock gauge ended the period at 875, it ranged between 577.60 and 1,051.70.

After stalling for 17 years, the U.S. stock market staged the biggest bull market in history through early 2000, driving the Dow up 15-fold from its low point in 1982. The surge coincided with a decrease in the yield on 10-year Treasuries to 6.68 percent from 13.55 percent. The rate was 4.21 percent at the end of 1964, and it peaked at 15.84 percent in 1981. On Feb. 3, the figure was 1.92 percent.

Lower Rates
Falling interest rates failed to lift stocks in the last decade as the S&P 500 slumped 12 percent from its high in March 2000. Equities slipped as the global economy experienced two financial crises, including the worst recession since the 1930s. Growth in U.S. gross domestic product averaged 2 percent a year between 1999 and 2011, compared with 3.6 percent between 1964 and 1981, and 3.3 percent from 1981 and 1999, according to data compiled by Bloomberg.

The retreat leaves stocks in position to rally because so many bearish investors can be lured back to equities and the market is cheap, according to Scott Minerd, the chief investment officer of Santa Monica, California-based Guggenheim Partners LLC, which oversees more than $125 billion.

“Stocks are poised for a generational bull market, whether it starts this year, or next year, or in five years, is anybody’s call,” he said. “Even if we had a 50 percent increase in multiples, stocks would still be cheap.”