Wall Street

Strategist Jeff Saut: The 8-year-old bull market still has up to nine more years left

Key Points
  • It's not even close to being too late to buy into the second-longest stock bull market in history, says the veteran Wall Street expert.
  • "This is going to be the longest, strongest secular bull market of my career, and I've been in the business 47 years," Saut says.
  • He spoke on the 30th anniversary of the Black Monday Crash of '87.
'Black Monday' crash of 1987 happened during a secular bull market: BofA's Mary Ann Bartels

It's not even close to being too late to buy into the second-longest bull market in Wall Street history, veteran strategist Jeff Saut told CNBC on the 30th anniversary of the Black Monday Crash of '87.

With the Dow Jones industrials on Wednesday closing above 23,000 for the first time, many investors who are not in the market may be concerned that they've missed out on the eight-year run that has propelled the blue-chip average up more than 250 percent.

Saut said don't be.

The chief investment strategist at Raymond James believes there may be nearly a decade left in this secular bull market, which is defined as a market that's driven by forces that could be in place for years. It's not to say that there can't be corrections or even a bear market along the way. But he said the secular bull should prevail.

"I say secular bull markets last 16, 17, 18, 19, 20 years. And even if you start the measuring point in March of '09, you still ought to have another seven, eight, nine years left in this thing," Saut said Thursday on "Squawk Box." "This is going to be the longest, strongest secular bull market of my career and I've been in the business 47 years."

Thirty years ago Thursday, the Dow plunged 508 points or about 22.6 percent. An equivalent decline at current levels would push the Dow down about 5,000 points.

A month before the Oct. 19, 1987, crash, Saut was quoted in Barron's predicting a "waterfall decline."

"I didn't know to call it a crash cause I ain't never seen a crash," he recalled on Thursday. "There's not many of us around who have seen the '49 to '66 secular bull market or the '82 to 2000 [one]."

Saut said secular bull markets have three legs.

"The first leg ended in May of 2015. We went into this upside consolidation," he said. "We broke out of that consolidation."

"We're in the second leg, which is the longest and strongest. It's driven by the accommodative Fed policy that drove the first leg. But in this leg, it's when the economy starts to improve and you've transitioned from an interest rate-driven secular bull market to an earnings-driven secular bull market," he said.

Saut said it's "unknowable" when the third leg will start or when the secular bull will end. But he talked about the warning signs. "You go into a consolidation again and you'll breakout, and then you'll get the speculative blow-off leg like '95 to 2000." That five-year advance was characterized by the dot-com bubble bursting in early 2000.

As for the current secular bull market, Mary Ann Bartels, head of portfolio strategy at Merrill Lynch Wealth Management, agrees with Saut that it has more room to run. "We're talking 23,000. We'll be talking 30,000" down the road for the Dow, she predicted.

"What people don't understand is that the [1987] crash happened during a secular bull market," Bartels said. But she stressed, "This is a very, very different environment. And we're much more global than we ever were in 1987."

Back then, Bartels was a junior technology analyst at a regional brokerage in Nashville, Tennessee. "Most people know me as a technician. But I actually started on the fundamental side," she recalled. "I was only two years into the industry, so a crash to me was normal."

But she does not see anything like 1987 in the current market. "Earnings are there to support the market. If we didn't have earnings to support the market, that would be worrying," she argued. Another positive sign, she said, "We have a global recovery at the same time."