This bull market is a ghost. Nobody sees it. Those who do see it view it as an aberration with little to no staying power.
The level of disbelief with respect to the bull market of the past decade has not diminished in the slightest. It has only been upended by varying degrees of cynicism.
Cynicism with respect to the economy.
Cynicism with respect to the Fed.
Cynicism with respect to the markets.
Cynicism with respect to politics.
As we are in the process of kicking off the next leg of the bull market, this note serves as a reminder that there only a handful of individuals who have fully grasped what we are in the midst of presently. Those individuals can be counted on one hand.
That level of disbelief is a continuation pattern in and of itself. Never mind the fact that the price pattern, overall sentiment, global central bank liquidity, economic resilience, fiscal stimulus measures and so on, are creating a virtuous cycle the likes of which the modern financial system has never witnessed. We are getting layers of stimulus piled onto an already hot U.S. stock market while central bankers globally get on their knees praying to the economic gods for inflationary fireworks and doing everything possible to unleash that inflation worldwide.
Yet here we are with an overwhelming majority of investors who refuse to acknowledge the truth of what is occurring simply because they have bad case of recency bias, as well as an incomprehensible tendency to believe that since the bull market is X number of years old then it is mature, being susceptible to all types of negative outcomes simply because it has been persistent in nature and extraordinary in strength.
The exact reason investors are avoiding this market is the exact reason investors should be buying this market: It has been persistent in nature and extraordinary in strength.
Secular bull markets have expansionary tendencies in every single facet of their existence. This means that not only do multiples expand, not only do market caps expand and not only do various measures of sentiment expand, but the duration is also subject to expansion.
Your grandmother's secular bull market does not compare to the secular bull market of present. Each successive secular bull market redefines expectations moving forward, leaving those who rely on predictable, stale data scratching their heads as they nervously adjust their bow tie while watching CNBC and studying charts of historical price to earnings ratios.
Turn off everything. Everybody is lost.
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