Everything is always clear in hindsight. Back in early 2000 when interest rates were rising, the Fed was hammering the short end, Oil prices were skyrocketing and the post Year 2000 frenzy was subsiding.....it was so obvious that we had a NAZ bubble. Except to millions, like me, who had to suffer some pain on the way down over the next eighteen months.
Granted the market is pricy here. No doubt about it, but isn't it possible that the mirror image sceanario of early 2000 is now going to provide a few more months (at least) of price increases? Oil and fuel in general are very low, putting money in every consumer's pockets. The Fed is pumping liquidity into the market, encouraging the banks to lend and trying to keep Mr. consumer going. Housing starts are just fine, thank you. Refis as well. Economic outlook numbers beginning to look better...not great, but better. Inflation not yet a problem. War is a positive for morale and confidence, plus it pumps billions into the economy. Maybe we get an economic stimulus package of some kind to supplement already existing tax cuts.
Sure, 5% of the population is unemployed, but 95% still is. With more two family earners in the work force, this is a much better number from an impact on family income standpoint than the 7 or 8% of past recessions. Personal debt is a problem, but banks are healthier than in past recessions and can handle the shakeout. Worldwide we do have problems: Japan, argentina....the whole rest of the world. But, if American demand begins to pick up, the rest of the World will then follow.
Sure, the market looks pricey now, and it is. But in hindsight from eighteen months from now, maybe this is the turn (or close to it) that will be so obvious in hindsight. What if we see 4% growth next Year? It is not impossible.
I salute all my bear friends. You guys have been right on for quite a while now, but there will be a shift...and I feel some of that change in attitude and outlook may be happening now.
Anyway, I am 90% long, and have been since late September. Hope I am right and there is more positives to come. Maybe, Zeev, ...to da moon. (I would settle for 2600).
Pomp |
