Maybe so, but what is the trend in rates and inflation? While a market dying from old age and without warning wouldn’t surprise me, I suspect rising inflation, an uncooperative bond market, and an impotent Federal Reserve would surprise many.
Similar to March 2000, I believe one of the least appreciated risks facing investors today is one morning they’ll come into work and discover a stock market that no longer goes up.Despite the best efforts of dip buyers, financial television enthusiasts, and central bank talking heads, the stock market gets tired, rolls over, and dies of old age.And because this market lacks valuation support, stocks can decline considerably before genuine margins of safety reappear and protect investors on the downside.Total compensation rose 2.5% over the past twelve months.” “U. August S&P Core Logic Home Prices rise 5.9%” “Oil Extends Two-Year High as Investors Eye OPEC Extension” “Rent is Eating Up a Record Share of Americans’ Disposable Income” “Hot Labor Market Seen in Dallas Fed Manufacturing Markets” “U. Companies Add Most Workers in Seven Months” “Why the Biggest Metals Rally of the Year May Have More to Run” “NJ Transit is Missing .4 Million in Fares From Worker Shortage” “We have plans in place to respond to the approximate 8% per ton increase in manufacturing costs…increases were driven by increased labor, employee benefits and depreciation costs…” Oil-Dri conference call.“So the whole impediment…is labor and I think you may have witnessed this in the new home construction site where the demand is very strong and basically labor constraints in general are inhibiting the natural growth that could take place.” Pool Corporation conference call. I do not know when or exactly how the current market cycle ends, but when it does, I expect my opportunity set to change considerably.