In classic bubble-bursting fashion, the return trip took half as long as the ascent. Looking at the chart, it's tempting to view the retracement as marking the bottom before a sustained recovery. Net stocks have led Nasdaq up and down since 1998. I still think that a sharp rally will gain traction by February, as projected by my Nov. 29 column . However, I was wrong when I said that the point of maximum pessimism had been reached.
Individual stocks remain prone to land mines and wild volatility.
Here are three examples of why pessimism hasn't reached the level that marks the end of bear markets. There are only two ways exponential gains happen. One is in a market bubble. Those come along only a few times in a decade. The bigger the bubble, the longer it takes until the next one, which rarely forms around the same stocks.