People don’t like it when I tell them the Dow is going to 30,000. They tend to get even more worked up when I tell them it’s going to 40,000 after that.
I’m old enough to remember a time when stocks going up was a good thing. In my opinion, there is still a massive amount of underexposure in the equities market.
So when I get asked, “Well JC, what’s going to take stocks to those levels?”. I think it’s pretty clear that it’s Technology:
When you go back and study the greatest crashes of all time, you’ll notice the time necessary for repair. I think Tech stocks after the late 90s bubble has been another classic example. Then, in 2016, things finally got going to the upside. We were right here talking about it in September 2016. My friend Josh was talking about this new trend as well.
It’s been mostly a straight shot up since then. My point here is that there is no evidence of it slowing down.
We then want to start to think about what the individual components within Technology will have to do to be able to take the sector to where we think it can go. How high will Apple and Microsoft have to get to drive this? I think we need to up our targets accordingly.
I hope this inspires you to take a step back and really evaluate where we are from a historical perspective. Europe is flat for 20 years. Taiwan is flat for 25 years. Hong Kong, Australia and Canada are flat for 12 years. Emerging Markets have done nothing for 8 years. US Financials are flat for 12 years. I’m not sure what long bull market people are talking about. I’m just not seeing any data that supports that thesis. I’m seeing a lot more evidence that points to us being near the start of a new bull market in stocks where we need to be buying them, not selling them.