>>I've labelled the demographic argument "the modified greater fool theory"....<<
You know, I can agree with your label 100%, DAK. Many, many stocks were trading, are trading and will trade at ridiculous multiples of their private market value. I don't think that I have ever said, in any of my bullish rants, that US equities should trade at 25, 30, 40 times earnings. What I have said and am saying is that US equities will trade at much higher prices again, sooner rather than later. There is absolutely no rationale for the 10 year sideways market, other than that is what a reasonable person would expect right now.
But Mr. Market doesn't know or care what is "reasonable". There is more purchasing power and more flat-out obscene wealth in the US than in any other country at any other time in history. There are people in the world who hate us because we spend more on cat food than the combined GDPs of the countries of sub-Saharan Africa. (Tough! Live with it.) There is a whole generation of folks who are not satisfied with money market returns. The buying potential is there, big time. The spark that reignites the tinderbox is coming very, very soon, in the form of a solid jump in corporate earnings. All IMHO, of course.
BTW, I am not sure that I am right, though I think that probability favors my pov. |
