‘Real Bull Market’ To Shrug Off Recent Sell Off

Eighteen times Michael Shaoul has watched the U.S. stock market lose 5 percent or more since 2009. Eighteen times he’s been rewarded for holding on.

The bulls are being tested anew by a retreat that started in emerging markets and has since spread to developed countries, erasing $2.9 trillion from global equity values. Again, Shaoul’s Marketfield Asset Management LLC isn’t selling.

“This is a real bull market,” Shaoul, whose assets under management have risen to $21 billion from $400 million in 2008, said in a phone interview. “What happens in real bull markets is they do fine, and then they are occasionally interrupted by an exogenous shock.”

It’s never easy, Shaoul says — the threat posed by emerging markets is the greatest he’s seen since 1998, and declines may worsen. Still, while U.S. stocks are being dragged down, the things that have kept market dips shallow in developed countries are intact. Corporate profits rose the fastest in two years last quarter, economists boosted projections for U.S. gross domestic product the first time in four months, and money-market indicators show no signs of strain.

Bloomberg

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