The NZX 50 Gross Index reached a low point of 2418 on 3 March 2009 and since that point has risen 1074 points to close at 3492 on April 21 2011. A rise of 44.5% in just over 2 years.
Almost half that gain has been since mid 2010.
One definition of a bull market (there are others) is that it has moved by 15 - 20% over an extended period and the more than 40% rise in the last 2 more than covers the meaning of a bull market for me.
One way of looking at this is that the market as a whole has come off an incredible low after the October 2008 financial crises and that it is still far from the high of 4333 reached in May 2007 but 2007 was a heady time for stock markets the world over and they were set for a correction from these levels as P/E multiples and other crucial financial data were fast separating from any semblance of real value on the stock market.
I prefer to look at it as more of a realistic valuation of the companies listed on the NZX and anything north of current levels risks going over real valuations. Of course there are some companies that are undervalued still and others that are well overvalued but as an average the NZX is fully priced and at the right level.
Of course the market can still add points from the closing prices last week and it remains uncertain as to whether the current bullish sentiment will remain over Winter without signals driven by results. Look for positive August results to propel the market higher but a good indication of where Winter 2011 was will be profit results out in February 2012.
My stab in the dark 3 years ago on a bullmarket run for 2011 (albeit for different reasons than a 2011 World Cup and post a financial collapse) still looks like a 50/50 call to me.
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c Share Investor 2011
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