WHY BE LONG TERM BULLISH? WELL, HERE ARE 6 REASONS
Posted By admin on Jan 14, 2011 |
- Investor sentiment - retail investors have abandoned the financial markets like at no point in recent history. Wall Street is seen as a group of criminals in suits, which isn't entirely incorrect...but when retail investors actually begin seeing the truth...it creates an enormous amount of sideline money, that will come back into the market as we continue pushing higher.
- Classic wall of worry scenario taking place - the economic fundamentals are perceived by everybody to be so awful that it has created a classic wall of worry scenario. This keeps just enough people on the sidelines to keep the fire burning in a bull market.
- Liquidity excesses - an enormous amount of cash provided as a result of the excessive liquidity that has been thrusted into the marketplace. Not to mention, investors are holding onto tons of cash as outflows from funds have become the norm over the past couple of years.
- The inflate or die trade - very simple, the global central bank cabal is still in inflate of die mode. They have literally told us that they will not allow asset prices to decline. Moral judgments aside, this is bullish for the markets. Inflate we will...and financial markets have a tendency to overshoot by vast amounts.
- Gold - it's the leading indicator of asset prices. It's the leading indicator of the inflate or die trade, and it has a good 1-2 year headstart...it's literally towing the rest of the asset prices higher. Everything from corn to stocks.
- A market dominated by professionals - you know what happens when you have a bunch of short-term orientated, trigger happy professionals dominating the market? You get short term pullbacks, but nothing more. Everyone is so concerned about the next swoon as a result of the pain they have experienced over the past few years, that bearish sentiment rises to extraordinary levels, extraordinarily fast. This means that as soon as weakness is observed...hedges come into play, short-selling ensues, stock is sold...making the dips into minor events...and creating demand when the markets resume their uptrend.
