Sean O'Grady: Quite enough gloom for one week, thank you

It hurts. I am 12 per cent poorer than a month ago, and the only people to have made much money out of all this would appear to be terrorists themselves, principally the Osama bin Laden pension fund. It's all a bit grotesque.

It hurts. I am 12 per cent poorer than a month ago, and the only people to have made much money out of all this would appear to be terrorists themselves, principally the Osama bin Laden pension fund. It's all a bit grotesque.

How long can this go on? Do you, in other words, pile in right now when things look cheap, or can you reasonably take your time when you do your bargain- hunting? All the historic precedents suggest that there's no real hurry.

The shortest bear markets since the war were the last two, from August 1987 and June 1990, both lasting four months. The longest were those that began in November 1980 and January 1973, which lasted 23 and 20 months respectively. Interestingly, both the last two were characterised by very serious geo-political troubles – in the early 1970s with the Middle East, and in the early 1980s an Iranian revolution and an invasion of Afghanistan (that time by the Soviet Union) eroding confidence.

And just for a bit of fun, yes, fun, I have looked up that Ursa Major of bear markets, the great crash of October 1929. As the chart shows, the S&P 500 hit a high in September 1929. It did not get back to that level until November 1954.

At its worst the market fell 89 per cent from its peak – but it took until June 1932, a total of 32 months, to hit rock bottom. Note also that there were eight ineffective interest rate cuts by the Fed along the way.

The Fed had tried to push the market higher. But, like a string, it had merely collapsed. Hence, I think, JM Keynes' phrase "pushing on a string". So yes, even though we're now some 18 months into this bear run, the uncertainty that drives confidence out of markets looks set to continue for some time, and, as in the Thirties and with Japan today, rate cuts may not revive it.

After all, everyone says this will be a "long war" and only time can tell if the West will inadvertently lose Pakistan and Saudi Arabia to militant Islamic revolution. Wait and see would seem to be the motto for now. All that said, there may be a case for some cautious accumulation. First there is car hire firm Avis, which has been marked down to the extent that it now trades at around £1, a discount of about 20 per cent to its 1997 flotation price, a disappointing turn of events for those of us who have been with it since then. It is now on a p/e of about 7.6, just about the lowest in its sector. Of course it is linked to fly-drive tourism and it will be hit by the current crisis. Yet this is a company that does not operate in the USA and businesses in Europe, Africa and Asia insulate it. Perhaps Avis should try harder to put a positive spin on events.

The second tale, and here I am on even more speculative ground, is lastminute.com, which, being an internet retailer that sells lots of holidays and air tickets, has not had a great deal going for it lately. But there are some upsides. First the trading statement issued on Monday seems to have satisfied analysts' expectations.

And lastminute might just prosper in a world in which people won't want to commit themselves so much to specific advance dates for flights, but will prefer instead to book at the last minute when they can see how the world looks. Third, all that hype and anti-hype have at least created a reasonably well-known brand. So I decide bravely to top up my modest holding at 22p.

"How long is this going to go on?" is also a question that could be usefully asked of Equitable Life. Like many other unhappy policyholders, I received a hefty pack from the society this week asking for comments on the compromise proposals designed to broker the interests of GAR and non- GAR policyholders. I can't pretend to understand it, although Radio 4's Moneybox on Saturday made a good stab at explaining matters. Given that I have only a relatively small policy, and that the alternative would appear to be a further destabilisation of the society at a difficult time in the financial markets, I guess I'm in favour of it. I'm not sure I can take much more gloom.

s.ogrady@independent.co.uk