“Happy Days are Here Again!”

With references to FDR and the New Deal, America embarks on a new expansionist phase backed by incredible fiscal largess and monetary ease. No one knows how this will all work out. Will we have an unrelenting wave of inflation? Will the U.S. dollar lose favor around the world? Are asset prices riding the surface of an expanding bubble that will burst? The Bull repeats: no one knows. Cases can be made on both sides.

What we can know is that current policies are leading to higher stock prices. Are they backed by reality? Some are and some are not. That is nothing new. It has always been on investors to sort out the good from the bad. Earnings are being reported for the first quarter and most are terrific. So, reality is supporting much of what market participants have anticipated. We are having a strong economic and profit recovery.

The Bull and his partners have long held that with this much stimulus and liquidity, stock prices would have to climb. That is still the case. So far higher prices are being supported by underlying fundamentals. Sit back and enjoy the ride. We will continue to sort the wheat from the chaff and position portfolios to benefit. Stay steady my friends.

The Lonely Bull