My thesis is that the Greek bear market is over, and a new bull market has begun. Evidence: 1) Price action - the Athens index is up about 60% from the lows, and now up 9% on the year 2) The lows earlier this year had the hallmarks of a bear market bottom - a huge multi-hear decline of 90% from the 2007 highs, economic and political news extremely negative, sentiment extremely negative 3) The major factor inhibiting prices was the fear of a Euro exit - but that has now been practically eliminated by the introduction of the ECB backstop. And just as importantly, market prices responded very strongly after this news. 4) Valuations are still extremely cheap I don't see any credible evidence that a bear market is still in progress, or that the market is in a range. So, IMO the odds strongly favour a huge multi-year advance in Greek equities (and risk assets of all kinds - bonds, real estate etc) The question now is how to play it. The model for the Greek situation is similar secular collapses to bear market bottoms, such as Brazil 2000-2002, Argentina 1999-2001/2, Russia and Asia in 1997-98, and so on. Once the lows were reached, these markets typically rallied at least 200% from the bottom within a couple of years, and many went on to advance huge amounts e.g. Russia went up 40 fold in a decade, Brazil went up 20-fold in USD terms within 6 years. Granted, they had other economic tailwinds from the BRIC theme, that I don't think Greece will have. So a better comparison might be Asia 1998 (although those bull markets were hit somewhat by the 2000-2002 bear market in the developed world) - markets like Korea and Thailand rallied huge off the lows there. Studying these prior examples, the way to play these rallies is fairly simple - get broad-based exposure to the equities, currencies, and sovereign debt of the markets involved. Equities pay the most, but with the most volatility - for example, Brazil stocks had setbacks of up to 1/3 at times. Sovereign debt pays large cashflows and still makes large capital gains, with less volatility but less profit than stocks. And the currency almost always appreciates a lot in these situations. So, my view is that a mix of Greek stocks, Greek sovereign debt, and Euro exposure (i.e. don't hedge the stock/bond investments) is best. Further tweaking would be to buy the best-performing stocks during the rally. These are usually i) the ones most beaten down in the bear market, that just avoided bankruptcy (think financials in early 2009 USA) - but they will normally rally hard only for the first year or so, not the longer-term ii) the best of breed stocks (think AAPL, CMG, BIDU etc in late 2008/early 2009), these can be held longer term. There are three main things to get right in this situation: i) have on serious size - these are opportunities that occur once or twice every 5 years or so ii) don't sell too soon - riding out the 20-35% corrections pays well over the longer-term iii) get long as soon as you realise the new bull has started - don't wait for pullbacks, because the opportunity cost is making 2, 3, 4+ times your money, and the risk of entering at a short-term peak is losing 20-30% temporarily. The risk, if wrong, is that the bear market is not yet over, and Greece goes into some unique kind of death-spiral where the general index falls even more than 90%. In this case, the risk control is pretty simple - sell at new lows, or a sustained break below major support. The lows were around 490 IIRC on the Athens Composite index, and major support is around 580-590. Against today's prices of 850, that is risk of about 30%. The upside, if correct (which I think is about 80-90% probability) is probably at least a triple from here, so the risk/reward is about 10:1 minimum. In my opinion, an exposure of 30-50% of assets is justified in such circumstances, risking 10-15% to make 100-150%. Any comments?