May 9, 2024
By Peter Bower
The numbers are great! Profits as a proportion of our economy are near all-time highs. Certainly, there are some disappointments as there are always a few. However, many of these are only disappointing compared to very high expectations. In absolute terms, many are still remarkable. Expectations have been very optimistic and have still been met in most cases.
So, this good stock market is being propelled by great earnings, not irrational exuberance. That is precisely why the Bull and his partners expect this rally to continue. Sure, there will be volatility. After all, with a presidential election coming up, war in the Middle East and Ukraine, competition with China, among many other factors, there are plenty of distractions from the underlying good business environment.
As always, keep focused upon the most important factor companies are valued by: how much does it earn for its owners? The rest is not all noise, but most of it is! No one gets rich trying to predict the effect of macro events on the value of productive assets. These come and go as momentary blips in the history of stock market returns. Stay steady my friends.
The Lonely Bull
