A Brief History of Secular Bull Markets

Last Monday, Leopold Aschenbrenner was running one of the hottest hedge funds on the planet. The 24-year-old former OpenAI researcher had turned his AI thesis into a fund that peaked at a reported $45 billion, up 439 percent for the year through June. By Thursday, he'd sold his entire portfolio of public stocks to Ken Griffin's Citadel at a discount, forced out by margin calls after a 67 percent loss in July.

Notice what didn't cause this. It wasn’t that the AI story died last month, and his thesis may still prove correct over the years ahead. What took him down was borrowed money. Reports put the fund's leverage as high as 400 percent, and leverage means you don't get to wait out a drawdown. Your lenders decide when you sell, and they always decide at the worst possible moment. An unleveraged investor holding the same stocks would be sitting on losses today. Aschenbrenner is sitting on realized ones.

I'm opening with this story because gold and silver investors are living through their own drawdown right now, and the lesson transfers directly. Gold closed Friday around $4,040, roughly 28 percent below its January peak of $5,597. Silver has taken the harder hit, trading near $58 after touching $121.62 in late January, a drop of roughly 53 percent. Six months in, plenty of readers are asking whether the bull market is over and when this drawdown is going to end.

To answer those questions, let’s look at what happened inside the two previous secular bull markets in the metals, because both contained drawdowns that looked a lot like this one, and both punished anyone who couldn't afford to sit through them.

Start with the 1970s. Gold rose from $41 in September 1971 to $835 in January 1980, a gain of roughly 1,900 percent. Collecting that gain meant sitting through misery. In 1973, gold fell 28 percent over five months. The brutal one came in 1975 and 1976, when gold dropped 46 percent over 20 months, from $193 down to $104. It took nearly three and a half years to make a new high. Anyone who sold at that bottom missed the trade of the decade, because gold rose 700 percent from that trough to the 1980 peak.

Silver's version was uglier. It fell 44 percent in 1974 and needed five years to reclaim its old high. From that low of $3.79, it eventually ran to $49.45, a 13-fold gain.

The 2001 to 2011 bull told the same story with smaller numbers. Gold fell 22 percent in five weeks in 2006, then 29 percent during the 2008 financial crisis, sliding from $1,002 to $710 over eight months. It needed about 18 months to reach a new high, then climbed another 167 percent to $1,897. Silver got hit repeatedly, dropping 33 percent in 2004 and 35 percent in 2006 before the big one in 2008, a 57 percent washout from $20.75 to $8.95. From that low it gained more than 440 percent, peaking at $48.41 in April 2011.

The data shows two consistent patterns. On depth, every major bull market in the metals has included at least one gold drawdown of 25 percent or more, while silver's mid-cycle drawdowns have routinely reached 40 to 57 percent. Today's pullback sits inside both of those historical ranges.

On duration, the peak-to-trough phase of past corrections ran anywhere from five weeks to 20 months, and the full round trip back to new highs took between seven months and five years. Six months in, this correction isn't unusually long by historical standards.

Each time, the mid-cycle corrections bottomed while the underlying drivers, currency debasement in the 1970s and negative real rates in the 2000s, stayed in place.

In 2026, Central banks are still buying, silver is still running significant supply deficits, and real rates remain the swing factor as the Fed debates its next move.

I believe we're in a secular bull market bigger than either of the two above, with the most substantial gains still ahead of us. And that belief is precisely why I talk about risk management so often. The data makes the price of admission clear. Both previous bulls handed their largest gains only to investors who sat through declines of 25 to 57 percent along the way.

Realizing the gains ahead means getting through the drawdowns between here and there with your capital and your conviction intact. That's the part Aschenbrenner's lenders took away from him. That's not caution for its own sake. That’s the entire game.