DAVID KOTOK: This Bull Market Is Only Half Over

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Photo: Daniel Goodman / Business Insider

Cumberland Advisors head and noted angler David Kotok says investors should hold onto their reels for at least another year.In an interview with Index Universe, Kotok said given historical patterns of periods following nonrecession bear markets, the current bull market still has…fins.

The market is following a pathway similar to other bull markets that occurred after a nonrecession bear market. We had a nonrecession bear market from April 29, 2011 to Oct. 3. If we track the median outcome of the past World War II periods, this bull market is only half over. It could take another 10 to 30 months to gain the other half.”

Despite uncertainties that have now been discussed ad nauseum (Europe, Fed action), Kotok said he favours an optimistic posture.

“The issue at hand is if the U.S.-focused investor wants to bet on the risk outcome or wants to favour a position that reflects ongoing slow but gradually improving U.S. economics. I choose the latter.”

Finally, Kotok identified his favourite and least favourite ETF sectors.

Regarding the former, Kotok said health care “has been maligned for years” and the industry’s ETFs were “cheap.”

His least-preferred were telecoms and utilities — Cumberland has completely sold out of positions there, he said.

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