Remember when bear markets used to stick around like that one friend who overstays their welcome? You know, the ones that would crash your portfolio party and then camp out for years while you slowly rebuilt your wealth one sad dollar at a time?
Well, plot twist: those marathon misery sessions might actually be becoming extinct. And before you roll your eyes and mutter “sure, this time is different,” hear me out—because the math behind this is actually pretty wild.
The Great Stock Shortage
Here’s the thing that’ll blow your mind: we’re basically running out of stocks to buy. Not literally (don’t panic), but the numbers are bonkers. Back in the ’90s, there were over 7,000 publicly traded companies in the US. Today? We’re sitting at under 4,000.
To put that in perspective, we went from 30 public companies per million Americans in 1996 to just 13 today. It’s like musical chairs, but with fewer chairs and way more money chasing them.
Meanwhile, there’s a record $7 trillion just sitting in money market funds, basically twiddling its thumbs and waiting for the right moment to jump into stocks. That’s “buy a small country” money just hanging out on the sidelines.
The Buyback Bonanza
But wait, there’s more! Companies have been buying back their own shares like they’re collecting Pokemon cards. We’re talking $55.3 billion in stock buybacks in Q1 2025 alone, compared to just $12.8 billion in Q1 2019. That’s a lot of shares getting yanked off the market.
Hank Smith from Haverford Trust (who manages a cool $15.3 billion) puts it perfectly: “It really is the result of supply and demand. I don’t think it’s much more complicated than that.”
Translation: fewer stocks + more money = prices that bounce back faster than a rubber ball on steroids.
The Evidence Is In
Look at the recent crashes: 2020’s 35% nosedive and 2022’s 25% tumble both recovered to new highs in under a year. Compare that to the old-school bear markets that would drag on like a bad Netflix series that should’ve been canceled after season two.
Even BlackRock’s Rick Rieder is calling this the “best investing environment ever” because the demand versus supply situation is “pretty extraordinary.” When the guy managing trillions says the technicals are “crazy,” you know something’s up.
The Bottom Line
Does this mean bear markets are dead? Nope. Markets will still have their dramatic moments—they’re basically the theater kids of the financial world. But those multi-year recovery periods where you’d check your portfolio and immediately need therapy? Those might be going the way of the dodo.
The new reality seems to be: crash hard, recover fast, repeat. It’s like the market discovered energy drinks and now everything happens at 2x speed.
So the next time someone starts doom-scrolling about the next big crash, remind them that in today’s supply-constrained, cash-heavy world, even the scariest bear markets might just be temporary tantrums rather than multi-year grudges.
Just remember: this isn’t investment advice, it’s just one very interesting way to think about why the market might be getting more resilient. Your mileage may vary, and past performance doesn’t guarantee future results—but hey, at least the math is on our side.