ARE we nearly there yet? There is hardly a parent in the land who has not heard this cry from some fidgeting offspring in the back of the car – often within minutes of leaving home.

At the third time of asking, as the traffic grinds to a halt on some rain-sodden motorway, it is tempting to answer: “No, but we can always let you out at the next service station where you can spend the weekend filling out AA membership forms and counting Eddie Stobart juggernauts.”

For all that, I have been asking myself the same question in relation to the stock market. Have we seen the worst? Are we there yet? Was that sell-off on Monday the low for this cycle – or is there still a way to go?

It seems a crazy question to ask while there is still panic in the air. These are frightening times. Banks are tumbling like ninepins, the money markets remain frozen and George Bush is actually making sense for once.

Had you spent September on some desert island and returned to discover that Lehman Brothers, Merrill Lynch, American International Group, HBOS, Fortis and other big names of finance had either gone bust or been rescued you might imagine that the start-up of Cern’s particle accelerator had plunged us all into a parallel universe run by Nostradamus.

Market lows, though, are often marked by a cathartic collapse. Indeed, until you hear someone say “This is the end of capitalism as we know it, John,” you can be pretty sure we have not yet reached the point of maximum despair which so often marks the turning point.

Back in August I mused that this bear market still had another down leg to come. Have we now seen that? If the measures to bail out the US banks work, and are followed by interest-rate cuts worldwide, might the markets stabilise?

There is, of course, the little of matter of a looming recession. According to Merrill Lynch, downgrades to corporate earnings estimates now outnumber upgrades by two to one worldwide. But stock markets look a year or 18 months ahead. Share prices will recover long before companies start reporting better profits. One supposed buy signal has already flashed. The yield on shares now exceeds the yield on 10-year gilts. If you can get a higher return from company dividends, which should rise over the years, than on gilts, where the return is fixed, shares should be cheap.

However, I worry that this dividend yield is illusory. In the past month, companies as diverse as directories business Yell to gents outfitter Moss Bros have axed their dividends. Woolworths, now the walking dead of retail, did the same – much to my consternation as I still have the shares in my portfolio. Lloyds TSB is to pay this year’s final dividend in shares – which is no dividend at all.

Against this backdrop one has to be wary about making assumptions about future dividends.

Two months ago I talked about buying back the shares I sold last year (at more than four times today’s price) in the pubs and restaurants chain Mitch-ells & Butlers. As the latest update confirmed, M&B is demonstrating great resilience. With an average main meal price as low as £3.92 in its Pub & Carvery outlets, M&B is stealing market share from all and sundry.

The shares languish at not much over £2 when break-up value is £3.50 or more and the company is discussing ways of shifting the properties into a tax-effi-cient real estate investment trust. The reason is that people worry about the sustainability of the dividend. I personally think it is safe and remain very tempted to pick up some shares.

I also like the look of Meggitt, the international aerospace business, now trading at under £2 again. In August, Meggitt reported an 18% uplift in the order book and raised its interim dividend by 10%. However bad life gets, Meggitt, like aero-engine maker Rolls-Royce, gets close on half its revenue from after-market sales.

So what is deterring me from picking up these shares? I worry that the market is not pricing in the possible extent and duration of the coming recession. Even if the banking crisis is solved, the upside for shares looks limited.

The thesis propounded by hedge fund king George Soros – which I outlined here two months ago – is that this is more than just a cyclical downturn. The good old days will not return until decades of overambitious credit expansion are unwound. I agree. The process of adjustment will take time.

The only answer, it seems to me, is to play market swings – picking up stocks on the downswings and peddling them out on the up. And if I get that right, I really will have earned my corn.

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