Finweek English Edition - - Companies & markets -

A HEALTHY COR­REC­TION or the end of the bull run? Who knows? But I must cau­tion against one thing: an­a­lysts who ar­gue that we need fear noth­ing more than a 5%-10% cor­rec­tion in share prices have forgotten their his­tory.

The JSE all-share in­dex may have given up this year’s gains, but that’s the cul­mi­na­tion of a bull mar­ket that goes back into the last cen­tury. I’m not sug­gest­ing th­ese re­as­sur­ing voices are on a par with those who, when Wall Street had fallen 20% or so

A ma­jor cor­rec­tion is not 5%-10%, but


in 1929, reck­oned the worst was over, when the mar­ket in fact had an­other 60% or 70% to fall.

I’m not say­ing that’s where we’re headed, but re­mem­ber that a ma­jor cor­rec­tion is not 5%-10%, but 30%40%, and it would be fool­ish to be­lieve we’ll never ex­pe­ri­ence that sort of thing again.

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