99 Problems But A Bear Market Ain't One
I'm still on the road and heading back tomorrow morning. I do an annual trip with my Dad where we try to catch a football game in a town we've never been to. I usually like to match that up with some business as well and this year is no different. Last Thursday I was invited to speak at the Northern Ohio Chapter of the CMT Association. We had a great crowd and I got drilled with smart questions. I really enjoyed that a lot!
Friday I met my father in Pittsburgh for the University of Miami @ Pitt football game which was a blast. Sunday we drove over to the Pro Football Hall of Fame in Canton, OH. What an impressive museum! And today we're doing the Rock & Roll Hall of Fame followed by the Dolphins @ Steelers on Monday Night Football! Jammed packed weekend with Dad, to say the least.
Looking through some charts today, we continue to see breadth expanding, not just in the U.S. but more importantly globally as well. I see people writing and tweeting out that they see weakening breadth. I must either be blind or we're looking at different data because we're seeing breadth expansion across the board. I guess some people just see what they want to see.
Anyway, so what do we know about all-time highs? Well, my friend Michael Batnick posted some stats about it this morning:
- This will be the 777th intra-day all-time high since 1982
- All-time highs have happened on just over 8% of all days
- The average 1-year return is 10.2%. The average 1-year return following an all-time high is 11.5%. This does not include dividends
You tell me. Does that sound bearish?
If you ask around, you'll likely hear that it is. Our intern's mom asked him this weekend if she should get out of the stock market because it's now at all-time highs. That seems to be the sort of mentality that we're seeing all over the place.
Jason Goepfert at Sentimentrader did a nice job of putting things in perspective today:
At the bottom of the market in 2002, 43% of "big money" investors in a Barron's survey were bullish. At the bottom in 2008, 59% were bullish. At the bottom in 2016, 38%. Now? Only 27% are."
Does that sound like euphoria? I think it's the opposite.
I'm still in the camp that, not only are we NOT near the end of a bull market, but the higher probability is we're just starting a new one.
People get angry when I tell them that. Again, probably not a sign of extreme optimism.
I'm not sure what people are so scared about or angry at these days. Breadth is expanding. More stocks and sectors are participating. We're seeing more and more countries around the world making new highs.
As my pal Tony Dwyer likes to say, the offense is on the field so we should call offensive plays. In other words, we want to be looking for stocks to buy, not looking for stocks to sell.
I'll be back at the office tomorrow with more!
JC