Analyst says bear market is beginning to level out.
Richard Cripps, chief market strategist for Legg Mason Wood Walker Inc., is urging investors to begin leaning toward small- and mid-cap companies with lower valuations and higher projected earnings growth than the Standard & Poor 500, because the economy is transitioning out of a bear market. Cripps predicts the equities market is moving in a much different direction than the immediate past markets

Time to say bye-bye to the bear?
In case you missed it -- or were too dazed to notice -- the stock market has bottomed. "The bear is dead!" screamed a recent stock market report from Alfred E. Goldman, chief market strategist for A.G. Edwards Inc. in St. Louis. Maybe it's a rash pronouncement, but other economists and market strategists are preparing eulogies as well.

Stock Investors Start to Believe That the Worst May Be Over
"We are all trained to look at this rationally and objectively, but I've got to say that there also was a gut feel that this couldn't go down too much farther," says Jon Brorson, director of stocks at the money-management arm of Northern Trust Corp. in Chicago. "We all sat together in meetings and said this has got to turn, this has got to turn. It was basically one of those chewed-on-pencils kinds of things." The firm has urged its clients to shift some money out of cash reserves and into stocks. Technology stocks took some of the worst punishment over the past 15 months, but even some longtime skeptics about tech stocks don't expect the broad market to fall much more. Although "the incredibly strong stock market that we have experienced for the last few years is unlikely to repeat itself for a while," says Henry Herrmann, chief investment officer at mutual-fund group Waddell & Reed in Overland Park, Kan., "I think the trend is up. So I guess I'd have to say that we are in a bull market." Robert Morris of Lord Abbett & Co. in Jersey City, N.J., another tech skeptic, says "I don't see how you could be bearish here" about the broad market.

And these sentiments are understandable, considering the market's strength...which is undeniable:

Oh, wait, did I mention one other thing? I think I should. These quotes were all from the spring of 2001. Allow me to share with you a bit of a larger context, with the above graph tinted in yellow.

So, in all honesty, I think that all of you that are in bull-mode right now probably have the same disposition- and reasons- that the esteemed individuals mentioned above had at this exact time of season seven years ago. And I think you'll be proved every bit as wrong. As for my bearish friends. May God smile upon us and, for once, reward skepticism and prudence.