Stock market S&P 500 Record High Sustainable - comments and opinions and bubble periods

S&P 500 Record High Sustainable  - comments and opinions

Market Trends

I am reading an very informative coverage of the periods of 1965 through 2000,"The boom and the bubble". it covers all the expansions and contractions we, japan, Germany, the em, and other have had. not relating it so much to the stock market cycles. putting in ones own picture of the markets through these periods where we had big bull movements it is hard to relate the markets ups for long stretches to any group of happenings. sure, the fed acted and the markets reacted but to relate fundamental to long market trends was hard to bring into the equation. most of the moves up were related to PE expansions and contractions of their own trends. in fact the bubble periods of 97 through 2001 was particularly interesting. after all the crisis of lTCM, the Russian default, the em defaults, japan in trouble, we had many years where the profits of the SP 500 were going down. the market saw fit to ignore this for 3 years until after 2000 when the tech bubble went bad. then everything changed. stocks became poison.
The fed could do nothing to change this trend so to say don't fight the fed, it works some of the time and the other time will be big loss years. the fed is not the last answer to the equation, nor are profits. there were no final answers, but hindsight says buy for 20+ years. at 73 my 20+ is history. so I will be waiting for a crash, however long it takes at this point.

---------------------------------

I think the author really hit it on the head. Most of the FED's capital injection is parked on the sidelines - about 5/6 of it to be more accurate. That is a TON of cash, and multiply by about 9 for the bank's ability to lend, and you have a massive amount of lending capability just sitting there. So the taper is utterly nonsense until it is directed at the housing market. Think about it - we have something like a 10 year supply of lending capital just sitting there. It doesn't mean that everyone might head for the exits at any time, just as John says, but until there is a catalytic event, seems like we're just going to grind higher.

----------------------------------

Stock Market

I don't care what the market does. I care what my stocks do, especially what they do for me, which is provide dividends. Occasionally they go to "unsustainable" heights (is there any other kind?), then they go lower and I get all antsy waiting for them to go up enough so I can stop worrying. I needn't bother, as steep declines are pretty unsustainable, too, even though you rarely hear that unmistakable voice of wisdom telling you that this "won't end badly".

"Yeah, you're crying now, but just you wait and see..."

How come the soothsayers don't say soothing things even when they should? I guess it's just human nature, though I prefer to blame the evil monkey in the closet. :-)