A majority of the investment population, both professional and otherwise, continue to not understand this market. The proof is in the performance of investors over the past several years along with reactions to extremely standard events like the October pullback. Short of cramming equity issues forcefully down investors throat, I was as clear and adamant as I have ever been that October was a substantial buying opportunity, one of the most substantial of this bull market, in fact.
One of the most widely read articles I have ever written on this site called for new highs to be seen in the popular market averages by year end when bearish sentiment was at its extreme in mid-October, with anonymous bloggers of false reputation being quoted by Business Insider as calling for continued severe price declines. Little did I know that new highs would be seen before months end, in what turned out to be one of the swiftest recoveries from a correction in decades.
Nobody expected it. Still, to this day, there are few that see what is going on. And what is going on is as powerful a bull market as any of us will experience. Those who were around in the 90s and truly digested the various nuances surrounding the bull will grasp what is at hand here. In fact, as has been discussed numerous times this year, we are very much on path for a 90s type continuation of the bull that puts up numbers in the major averages that few expect.
Witness: oil is crashing, metals are done, Fed Funds rate is set to rise, long-term rates remain low, mom&pop are absent from this bull market and far from returning, technology innovation is fueling the U.S. economy, investors are realizing that emerging markets can't compete with U.S. assets, the Dollar is king, the recession is still fresh in the mind of investors causing adverse bearish reactions at the first sign of trouble.
Interesting? Good, I'm talking about 1995, which was not even the mid-point of the bull market. We are very much replicating that environment now. There is no reason not to expect extraordinary growth in equities going forward based on the duplicative nature of price, fundamentals and time. The growing banter about valuations etc. is grossly early and horrendously useless. It is misleading to those who simply do not know better. Markets don't top on valuations, but rather emotions.
Emotion has invariably been present at every major market top. I was there in March of 2000 when I had distant relatives calling me telling me how much they have made in QCOM. I was there when ordinary computer engineers were buying mansions in Silicon Valley not because of pay raises, but because they were "savvy traders." I saw people become engulfed in futures and options like no amount of leverage was good enough. There is nothing to that extent today.
There is simply no emotion present in the current bull population. Just matter of fact analysis that is tempered back at the first 5% move down in the S&P. If anything, there is a malaise among the current population of bulls that expects to be shortly herded into the abattoir for a ritualistic slaughter.
In summary, put down the bag of steaming hot bullshit. Turn off the noise. This is a bull market. There is nothing else to it.
