Since I started this project in January of 2011 of self-revelation and transparency in research, I have been sounding a somewhat one-sided horn of bullishness. This has, of course, been sprinkled with intermittent warnings of impending doom when the market has been overcome by investor greed. The message, however, has been decidedly bullish in nature from the onset.
Articles like this one: "6 Reasons To Be Long-Term Bullish," published in January of 2011. And charts like this one, published a few weeks later, talking about Nasdaq 5000 in the next few years cemented my bullish views from the very beginning. I've never wavered the entire time, insisting that the market had done its work poisoning the hearts and minds of the investor class to the point that it could move up unencumbered for the long-term.
Here we are starting 2014 with the market increasingly showing its bullish hand with an exuberance and ferocity that we haven't witnessed for sometime. I've had to step back frequently and ask myself whether this type of behavior should cause me to pullback on my bullish expectations? Every single time I receive an emphatic "NO" from the resident investment committee sitting within my mind.
A market that has gone up X amount of percentage points over X amount of years is never a reason to sell. Those pundits who consistently pound the mantra of overvaluation, irrational exuberance and pending economic collapse are a breed of investor who are pessimistic by nature. They have no choice but to believe in the mantras they chant like a voodoo princess in a grass skirt. Increased market caps only cause them to cling onto their fearful ways tighter without regard for any message the market is trying to send. Their only care is that a time will come when this all ends. What happens in between isn't of concern.
Those of you who weren't around in the 90s, do yourselves the favor and go read the Silicon Investor message boards from 1996-2000. You will see a strong bearish contingent who neither saw the extent of the bull market that they were in nor cared to profit from it. Instead, their goal was to create a sense of intellectual superiority by coming up with statistical viewpoints citing the reasons why the bull market shouldn't be. Each tick up in the averages reinforced their viewpoint. In 1999, they went silent. In 2000, the bull market was done.
We are nowhere close to a mass, full-fledged realization of the power of this bull market. Institutions remain underinvested. Retail investors still don't care about the stock market. Investors globally are still perfectly happy sitting on cash. You want to see just how comfortable investors are with this bull market? Wait until the first 10% plus pullback we experience. It should come in 2014 and it will be x-ray vision for the astute investor into the heart and mind of the market. It will show observers just how timid investors remain of any weakness in the market. The memories that exist of the period that was 2000-2011 will not go away soon for investors. Those memories will be dredged up during any violent pullback experienced in 2014. And that is exactly why any violent pullback will be short lived but nevertheless dramatic.
There is no reason to look at this market for anything other than it is: A bull market of top pedigree, as demonstrated by the various leading averages that are performing exceedingly well. To overthink, overanalyze or overexert oneself in attempting to understand the minutia of what is causing this bullish surge is a great disservice not only to your own mind, but to your net worth.
In summary, I'm as bullish now as I was in 2011, 2012 or 2013. We are in the early/middle stage of a secular bull market that won't hit full stride for some years to come.
Treat it right and it will return the favor.
Happy New Year.
