Markets never stand still. So observes Daily Reckoning favorite, Chris Mayer, in his essay “Ireland On Sale”.
But why is this so? Why are markets always in such a hurry to go somewhere…and to where is it they are so briskly headed? That’s what investors want to know. Well, most of them, anyway.
At this very moment in time, the US stock market, as measured by the broad S&P 500 index, sits at multi-year highs. On the very crest of the wave. Not since the cowabunga days of late 2007 were stocks this expensive. The melt-up has been tremendous, no doubt about it. Indeed, provided the wheels don’t fall off today, you’d have to go back to the late 1980s to find a better performing January for Standard & Poor’s favorite 500 stocks. That’s pretty impressive stuff…even to an enthusiastically ambivalent newsletter editor.
Of course, nobody wants to know about the past. To the average man on the street, it’s the future that holds the real opportunities…the good decisions…his hopes and dreams…and the big money that comes with “getting it right.” The past has come and gone, he reasons. “Full steam ahead!”
Plenty are the folk who see redemption in the morrow. The future brings with it a chance to atone for the folly of yesterday, correct for the mistakes of the past, regain the losses of last quarter, last year…last decade and more. People don’t want to rehash old trifles, to resurrect sore memories. Time marches in one direction only and, as they say, time is money.
But there are no clues to be found examining the future. It is empty space. Vacant. Unoccupied. And it is untraveled. We can make predictions and forecasts, talk about “future earnings” and “projected profits,” we can extrapolate trends out to infinity and beyond. Still, nothing is confirmed until the rent is paid and the profits are earned…until the future becomes the present and the present has faded into the days of old.
Read More at The Daily Reckoning . By Joel Bowman.