Bear markets and market darlings: why investors are told to stay patient, while Nvidia, Tesla and Apple face a contrarian view
The Motley Fool reminds investors that bear markets historically end with sharp rebounds, so staying invested matters — while another Motley Fool piece takes a skeptical, contrarian stance on the world's three most actively traded stocks: Nvidia, Tesla and Apple.
Why you shouldn't abandon the market during a bear phase
Periodic stock market downturns, known as bear markets, are a normal part of the market cycle, though a painful one. According to mutual fund company Hartford, the average of the 27 bear markets since 1929 has dragged the S&P 500 down 35.2%, lasting an average of 289 calendar days. Brokerage Charles Schwab, citing CFRA data, agrees on the scale of losses but says the last 12 bear markets averaged 14 months in length — so the sources disagree on the exact duration.
The key advice highlighted by The Motley Fool is that nobody can predict exactly when a bear market will end, which is why it's crucial to be "100% invested" when the turnaround happens. Hartford data shows that over the past 20 years, more than a third of the S&P 500's biggest single-day gains occurred within just the first two months of a new bull market. The index's average gain is 13.6% in the first month of a new bull market and 25.3% over the first three months. Additionally, in nearly three-fourths of the 27 bull markets since 1929, the S&P 500 performed better in the first half than the second half.
A skeptical take on market favorites
In a separate Motley Fool piece, the author offers a personal, contrarian view on the world's three most actively traded stocks — Nvidia, Tesla and Apple — all of which most investors currently view bullishly.
On Nvidia, the author notes the company sold $89 billion worth of data center chips last quarter, up 117% year over year. However, alternatives are emerging, including Intel's CPUs as well as Alphabet's and Amazon's in-house chips built for their own cloud customers. Since Nvidia's stock is priced on the assumption of 84% revenue growth this year and 44% next year, there's little room for error.
On Tesla, the piece notes that mass production and sales of the Optimus humanoid robot could begin by the end of 2027, according to Elon Musk. Yet despite the buzz, the stock has fallen nearly 30% from its December peak. The author points to competitors including 1X Technologies' NEO robot, Figure AI's "03" model, plus Unitree, Apptronik, Neura Robotics and AgiBot, which could beat Tesla to market.
On Apple, the stock is noted to be near its late-July record high after a 150% rally since the end of 2022, with iPhone revenue up 22% in the quarter ending in June. However, the company recently got a new CEO, John Ternus — only the second since Steve Jobs — and Siri now runs on Google's Gemini technology, which the author sees as a sign that Apple's competitive edge is gradually eroding.
