This remains one of the most hated bull moves that I’ve seen in my career. Stocks have been running higher for more than 5 years now and the gains that have been available are downright impressive. And yet, investors continue to complain about valuations, the Fed “rigging the game”, the state of the economy, global debt levels, etc.
It is also interesting to note that everyone and their grandmother sees bubbles forming everywhere these days. While only a select few saw the bubbles in technology or the housing/mortgage markets building in 2000 and 2007, today, one can read about bubbles every single day on the popular financial websites.
Heck, even former Fed Chairman Alan Greenspan, who has been criticized for allowing the tech and mortgage bubbles to build – and then pop – made headlines on the subject yesterday. Greenspan reminded us that all bubbles end in a “crunch.” Thanks for that.
So, the first point on this fine Friday morning is to remember that bubbles don’t develop and/or pop when EVERYONE is looking for them. By definition, bubbles become an emotional thing. Investors clamor for the hot dot and almost no one “sees” a problem.
But unlike the heady days of 1999 or 2006, today, the watchword is fear. In short, investors don’t want to get fooled again. Remember, most investors are VERY adept at preparing for something that has already happened. Therefore, it seems that everyone is now ready for the next market calamity. Which, in short, means that the next bear market probably won’t look anything like the last two.
The most important things to understand about the current market environment are as follows…
David Moenning is the founder and chief investment strategist for StateoftheMarkets.com, a website dedicated to investor education and portfolio analysis. Mr. Moenning is also President of Heritage Capital, a privately owned, investment research firm. Heritage focuses on active risk management and an “own the best and ignore the rest” equity selection strategy.
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Positions in stocks mentioned: none
The opinions and forecasts expressed are those of David Moenning, President of Heritage Capital Management (HCM) and may not actually come to pass. Mr. Moenning’s opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security or Heritage Capital program. No part of this material is intended as an investment recommendation. Neither the information nor any opinion expressed constitutes a solicitation to purchase or sell securities or any of HCM’s programs. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that investment objectives outlined will actually come to pass. Investors should consult an Investment Professional before investing in any investment program. Neither Mr. Moenning or Heritage Capital Management nor any of their employees shall have any liability for any loss sustained by anyone who has relied on the information contained herein. Mr. Moenning and employees of HCM may at times have positions in the securities referred to and may make purchases or sales of these securities while this publication is in circulation. The analysis contained is based on both technical and fundamental research. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.