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:
- It's a bull market until proven otherwise
- The latest leg higher is not hitting on all cylinders
- Market Risk is elevated
- This type of environment can last longer than most can imagine.
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The views expressed here are that of myself or the cited individual or firm and do not constitute a recommendation, solicitation, or offer by myself, D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
The Jacksonville Business Journal has ranked D2 Capital Management in the top 25 of Certified Financial Planners in Jacksonville. The Firm is also a member of the Financial Planning Association of Northeast Florida, the Jacksonville Chamber of Commerce, the Southside Businessmen's Club, and the Beaches Business Association.
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