Sixth Myths About the Stock Market: Birinyi

By Steven Russolillo 

Birinyi Associates

The notoriously bullish Birinyi Associates wants to set the record straight: The recent stock-market slide isn’t a reason to panic.

A plethora of investors and strategists have cautioned that the market’s recent pullback could portend an even bigger correction, perhaps even the start of a new bear market. Concerns about the looming fiscal cliff top the list of worries for investors.

But, as Jeffrey Rubin at Birinyi points out in a note to clients, there have been plenty of 5%-to-10% pullbacks throughout the years that have come and gone without much harm being done. Since the March 2009 bottom, the S&P 500 has had 17 falls of at least 5%, according to Rubin.

The market has recovered from each one of them.

“While our view is unchanged and we remain positive, we do recognize how each correction feels like the start of a new bear market,” Rubin says. “With the decline some new and some not new ideas are being bounced around in support of the negative case. We thought we would take this opportunity to review the accuracy of some of the arguments for the negative thesis.”

Without further ado, Rubin presents six myths about the stock market:  (more)