Clem Chambers: The 'new old game' means major bull run is about to begin

This time of year is normally a bearish one for me. I have become nervous at the opening of many recent years - a useful instinct as it turns out.

But this new year is different - I am suddenly very bullish indeed.

I see the prospect of the beginning of a very strong period in the market. It could have already started or it could still lie a few more bumps into the future.

I am wary of being enthusiastically bullish, especially after the great run in the market we enjoyed in the lead up to Christmas since the lows of the summer correction. A bull run can breed bullishness and any opinion based on trend rather than theory is likely, at best, to be a 50/50 guess.

However, a revelation has struck me and I think it will be key to a large bull market that will run for several years. What tipped me off was the sudden appearance of articles in the US and UK exhorting private investors that the markets were just perfect for them to now jump into.

Why now? Nothing has changed since the market low of 2009 except the profits to be had from the bounce have already been gained.

Someone seems to be executing a large charm offensive to attract private share investors. What's the big idea?

With all the new regulation of financial services and banks, Wall Street and the City are now wondering how to replace all sorts of lost income.

Banks are being forced out of "prop trading". This means they are being prohibited from winning the equity trading game by playing against their clients. Because they have been winning it for so many years, the weakest competitors - the mainstream private investors - have long since been driven away from the market.

The "Sids" were culled to extinction by the sophisticated bank traders. Long gone are the heady days of investor participation of the 1980s and 1990s because private investors, who naturally want to play the trading game, were wiped out by the professionals. Only a rump of very canny investors remains.

Yet now, thanks to new US laws in particular and huge changes in regulation and fall-out from the credit crunch in general, the big banks can no longer play this game. This leaves them in need of a new game; it leaves exchanges needing someone to replace their trading fees and it leaves the institutions needing someone to replace the drying up liquidity of the market so they can operate properly. That is a big need and it has a simple solution: get the private investor back.

This new model is in fact the old model of the 1980s and 1990s: M&A, IPOs, share promotions and booming markets. It too is a cycle of boom and bust, but the good thing is that we have the boom ahead of us.

So instead of bank traders making hay, it will be the banks' brokers bagging the big money. It will be the same fat bottom line but coming from the "new old game" they played in the past before the dot-com crash. We are at the beginning of that cycle.

This will be a long-term trend and will be everyone's friend until the bend in the end and ensuing havoc. That havoc is for another era. Between now and then the "new old game" will offer plenty of opportunities for investors to enjoy the initial happy part of this age-old market story.

• Clem Chambers is chief executive of stocks and shares website www.advfn.com