The best performing markets in the world the last few years have been Zimbabwe and Argentina. Your friend whom you give hell sees something (even if he can’t articulate it) that you don’t.
There are two reasons for equities to go up. One is a sugar high rush from cheap money looking for a place to go, and creating a bubble in bonds and equities. The other is a fiscally healthy economy which produces jobs, inventive entrepreneurs, healthy profitable companies whose stock pay dividends based on EARNINGS.
There are two things about a bubble that are always shocking: 1) how long they go on before they pop, and 2) how deep the trough of despair and gloom and pessimism the resultant pop creates.
Both of these are exacerbated when central banks attempt to overrule basic investment/economic laws by creating cheap money.
I am not attempting to “call” the time of the correction. If I could do that, I would quit my job and just play the swings in the S&P (I used to be a commodities floor trader years ago..... back when there really was a “floor” -lol). What I can do is try to hedge myself against the lunacy of our fake economy, built on debt and cheap money, and dependent on the idea that ponzi schemes are extendable forever.
I am telling you that the refusal to deal with the underlying problems (debt fueled spending and debasing the currency) have built into such a problem that when it resets (no one knows when, maybe as far out as 5-10 years) it is going to resemble a complete collapse more than a correction. Naive simpletons who look at charts only —and I have been reading charts for over 30 years now — are going to be caught so flat footed they are going to be astounded at the devastation.
Yes, there will be a correction. Markets always correct to the downside, and to the upside. That’s why I’ve been taking profits off the table for over a year. I’m raising cash levels for two reasons, my age and the maturity of this bull run.
However, history has proved that equities have been the most consistent method of creating wealth in all of human history. Gold, property, bonds - none can touch equities.
I’m no Pollyanna when it comes to the woes that liberalism and The One have visited upon our economy. But anyone who bets against the long-term viability of the U. S. businessman and the creativity of Free Enterprise is taking a contrary position to historical patterns.