Calling the fake bear market

I get lots of mail from readers - US, UK, even Germany. No love letters - now, mostly hate mail. Folk are personally offended by my bullish view. Great! The more hate mail, the better - it tells me my bet against the masses is right. If everyone were telling me I'm a genius, then I'd worry.

Here we are... world shares down just 2% for the year. Same with British shares! Yet people still tell me I'm an idiot. Hooray! "Don't you realise there's a recession?" Really? Someone forgot to tell the US, who just had a tepid but decidedly not negative GDP quarter - in other words - no recession. 'You'll be sorry! Stocks are tanking!" Really? Since when? World shares are up 14% since mid-March and British shares 15.5%! And my favorite, "You git! This is a credit crunch." Nope - credit crunches don't feature increased borrowing and cheaper debt for large corporate borrowers. (Read The great credit grab of 2008)

So be gloomy and glum. Tell me I'm an idiot - but 2008 is far from over. We've had way too much gloom and doom. Time for some optimism.  And nothing's sweeter than being alone after a nicely positive year. Being right's way more fun than being popular.

No more bulls

Strangely, many critics call me a "perma-bull" - meant to be an insult. Ouch! Sure, I'm bullish a lot. But the market's positive a lot! Folk forget, I publicly called the last three full-fledged bear markets pretty well and mostly alone. (Pretty much the only others crying "bear" when I did in 2001 had been stopped-clocks calling "bear" for years before.) People called me crazy then too. If "crazy" means "right". I'm happy to be crazy.

Even better, on March 13, Goldman Sachs sacked its longtime strategist Abby Cohen. Her crime? She'd long been too bullish too long. Pretty much since shares have been up. Bulls getting sacked is a great sign. But, I always know I can be wrong. This year so far looks very much like a big but normal market correction - just like we saw in 1998. In fact, as I said in my article Go large in the markets, today looks very much like 1998 - a year shares ended up big and huge shares did best.

If this were a real bear market, no one would be talking about it as such just like they didn't in late 2000 or early 2001. I can't find a time in history when, five months after a true bull market peak, everyone agreed we were in a bear and facing recession. They only do that during corrections! How do you know? Look up "Russian financial crisis" on Wikipedia - the Russian ruble crisis that spurred 1998's big correction. The second sentence reads: "It was exacerbated by the global recession of 1998." Wrong! There was no recession in 1998! People just griped about one. Delightful! And today, they're saying we're in the worst financial crisis since the Great Depression. Bullish!

Get greedy

An old saying but true: "You should be fearful when others are greedy and greedy when others are fearful." What are people today? Exactly. Be greedy. But mostly about the biggest stocks, like these:

Does pricey petrol scare you? I doubt oil drops much from here any time soon. Don't fret - buy Britain's BP (BP-). BP has 18 billion barrels of oil-equivalent reserves, produces four million barrels daily, refines 2.8 million barrels in 17 refineries and discovers more oil at lower cost than anyone. And, its internal operations make up one of the world's largest shipping companies. It owns diverse brands globally, like Arco, AM/PM stores, Castrol, Wild Bean Café and Aral - Germany's largest gas retailer - as well as BP. And with a £115 market cap it's huge, which is good this year. Buy now, while it's at nine times 2008 earnings, 70% of sales with a 4.4% dividend yield.

If the Bear Stearns implosion makes you jittery, buy the firm that bailed it out (with a little help from the federal government): New York-listed JP Morgan Chase (JPM). This one shouldn't make you nervous - it's America's third-largest bank with a great balance sheet and the best bank chief executive. And, it's got a mega market cap - £82 - and looks good at nine times 2008 earnings with a 3.2% dividend yield.

Still convinced we're facing recession? Then buy recession-proof Abbott Laboratories (NYSE:ABT) - one of the world's high-quality healthcare firms, selling prescription drugs, medical components, test kits and health aids. It's big - £41 billion, and it sells at below the industry's average price/sales ratio at 15 times my estimate of 2008 earnings.

Ken Fisher is founder and CEO of Fisher Investments