Here we are at #2500, not so long after 2000. Let the good times roll! Certainly the case on Wednesday, and Briefing has an interesting take on the current situation:
General Commentary
My soon-to-be three year old son is currently obsessing on the Disney movie "Lion King." We watch it over and over again (editing out certain violent scenes). I'm not complaining, sitting through the "Lion King" several times beats the earlier "Barney" and "Blue's Clues" obsessions. And, I am not bring this up for the purpose of boring you with the viewing interests of my son. It's just that in watching the movie earlier tonight I was struck by an eerie sense that the marketplace has become Disneyfied. How else to explain the eye-popping, unprecedented run in the technology sector over the past 3-months, but the simple philosophy of "Hakuna Matata," espoused by Timone and Pumba. As my son Charles would tell you, "Hakuna Matata" means "no worries."
Given that the SOX index, Nasdaq 100, and Nasdaq Composite have jumped by 113%, 85% and 71% since their respective October 8 lows, I think it's safe to say the market has adopted the "trouble free philosophy." Nobody worries that valuations are at unmatched heights; no one worries that the President's impeachment trial begins today; no one worries that overall earnings growth has slowed to the low single digits; nobody worries that the number of people laid-off in 1998 was the highest total in 5 years and that more job cuts are in store for 1999; no one worries about the sharp drop in the CRB index (save those of you long copper or gold); and no one worries that the US economy is slowing. And don't give me the old market is climbing a wall of worry nonsense. If investors were worried about these, or any other issues, the percentage of investment advisors bullish wouldn't be 60%, and we wouldn't be seeing billions of dollars pouring into equity funds on a weekly basis. Nope, the only way to explain the one-way activity of the market is that investors have "no worries."
Scene from next week. Hey, Abbey Joseph Cohen the DJIA just hit 10,000 what are you going to do? A jubilant AJ Cohen shouts, "I'm going to Disney World!"
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