Throughout history, bull market cycles make up on one-half of the “full market” cycle. During every “bull market” cycle, the market and economy build up excesses which must ultimately be reversed through a market reversion and economic recession. In the other words, “What goes up, must come down.”
We have previously warned that employment data was suggesting the economy was much weaker than expected. As such, it was only a function of time until an exogenous, unexpected, event began the cascade of a recession and bear market.
The market has had a sharp rally over the last couple of weeks, which has investors feeling all "bullish" again hoping the crash in March was just an anomaly. However, there are some questions that "bullish investors" need to answer before assuming the markets are "all clear" of what ails them.
With a global recession underway, there are too many uncontrollable risks currently to maintain high levels of equity exposures. With the long-term bull trend now broken, cash is king.
With a global recession underway, there are too many uncontrollable risks currently to maintain high levels of equity exposures. With the long-term bull trend now broken, cash is king.
The action this year is reminiscent of previous market topping processes. Tops are hard to identify during the process as “change happens slowly.” But when the process completes, it will seem as if the change occurred “all at once.”
The market rally on Monday was the expected reflexive bounce we discussed in this past weekend's newsletter. The question now is how far it will go, should you buy it, and what you should expect next. The risks are high; a retest of the recent lows will come sooner rather than later.
I was stunned by a recent article from Marshall Auerback via The Nation entitled “Why Democrats Need To Stop Worrying And Love The Deficit.” “Delivering on big progressive ideas like Medicare for All and the Green New Deal will never happen until Democrats get over their fear of red ink.” While the article is long, […]
Shiller’s Cape – Part 2 “Price Is What You Pay. Value Is What You Get.” – Warren Buffett One of the hallmarks of very late stage bull market cycles is the inevitable bashing of long-term valuation metrics. In the late 90’s, if you were buying shares of Berkshire Hathaway stock, it was mocked as “driving Dad’s old Pontiac.” In […]