The bubble continues: S&P reaches $20 trillion in market cap for 1st time in history! Are earnings keeping up at this same pace? We don’t think so…

As I was flipping through a few news and finance channels on the television this morning, I saw on CNBC that, of course, the markets are hitting record highs yet again.  I started thinking to myself… how many posts have I done on this already?  Yet the markets just keep going up and up and up.  

This bull rally is so counterintuitive to the fundamentals however.  In a non-bubble bull market, growth in stock values occur when we see growth in corporate profits.  Makes sense right?  When companies make more money, they become more valuable and more people want to buy their stocks.  Here is what is so concerning:

screen-shot-2017-02-13-at-10-58-47-am

This article was released just a few months ago… corporate earnings have been on a steep decline for a long time.  This trend should be resulting in a bear market, however we are seeing all time record highs week after week.  Does this not make anyone else a bit concerned?  

I fear that we will soon be in for a massive correction in the stock market.  I think that with the Federal Reserve talking about their efforts to raise interest rates, Trump’s aggressive policies, and the fact that we are now 9 years from the last recession, we are going to see something big happen in the very near future.  I do not have a single dollar in the stock market right now, as in my opinion, the risk far outweighs the potential gains.

Remember the wise words of Warren Buffet:  Rule #1- Never lose money.  Rule #2- Never forget rule #1.  In my opinion I believe it is time to take profits now while we still can, and wait patiently on the sidelines.  Sit back and watch as the show begins.  There will soon be a VERY BIG buying opportunity coming our way.   

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s