Would You Believe?

A raging pandemic, civil unrest, another impeachment, and the stock market is making new all-time highs. The Bull has often written that markets do not ride the waves of headline news but respond to economics, earning prospects, and liquidity. In short, it’s the power of money! And what a force it is. We have incredibly accommodative monetary policies, and fiscal stimulus while at the same time few outlets for spending or investment.

With an economy still partially shutdown or barely active, consumption alternatives have been reduced. Interest rates are too low to be attractive and commercial real estate problematic. Therefore, profitable growing businesses are even more attractive. And that is where much of the new liquidity has been going. Positive money flow is the lifeblood of higher prices. Markets may wax and wane, but the tailwind of more money looks to continue for some time to come. Stay steady my friends.

The Lonely Bull