It's been a very odd share market recovery since the GFC. There are no rules to say exactly what starts the end of a bull market, so how do we know when it's going to end? Ultimately, we don't know.
The share market doesn't exactly repeat itself every 10 years, but it does seem to rhyme.
Some signals like price/earnings ratios, the number of takeovers and debt may simply be coincidence. The debt is likely just a sign of the low interest rates we are experiencing.
However, the high turnover of CEOs we're currently seeing could be a collective indication that they believe the economy could be about to turn.
Would you retire if you thought your business had a long uninterrupted growth runway ahead? I wouldn't enjoy the prospect of steering my company through the next recession.
There's nothing out of the ordinary with a company changing CEOs. No-one can work forever.
Some of the recent CEO changes that spring to mind include Macquarie Group Ltd (ASX: MQG), Challenger Ltd (ASX: CGF), Super Retail Group Ltd (ASX: SUL) and Class Ltd (ASX: CL1).
I would not be overly worried for those companies specifically because it is now that the CEO is leaving, not in the middle of a recession. However, it does raise the question about whether the businesses will be as successful in the upcoming few years as they have been over the past few years – particularly for cyclicals like Macquarie and Super Retail.
Foolish takeaway
It would be nice if some management stayed around for decades like at Berkshire Hathaway and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).
However, you must expect that management of nearly every company will move on at some point – management alone shouldn't be your only reason for picking a company.
Although the individual CEO changes don't mean much, it is very likely that this bull market can't keep going on for more than two or three years. Indeed, we have already seen it pull back in recent weeks.
