It doesn’t have the characteristics of a
bubble... Remember the style from 2000, or Japan in ‘89, or the U.S. housing market... or 1929 in the old
days was a classic. We have almost none of that euphoria. We also have very imperfect fundamentals. [I don’t see] mad desire to invest in the stock market. I agree with him, 100%. We are not seeing the classic signs of a bubble, yet. We don’t see “mad desire” to invest in stocks, yet. Investors know that stocks have gone up for eight years. So they think they have to come down. Stocks will come down, eventually... But we are not at that point yet . Jeremy Grantham – the guru of bubbles – says that we’re not in a bubble today. Who would know better? I agree with him. We are not in a stock market bubble – yet. Don’t let ‘em tell ya any different.
THE MELT UP BEFORE THE MELT DOWN What we’re experiencing right now is what I call the “Melt Up.” It’s the final push higher in the bull market. And the gains could be extraordinary. Stocks have gone up for seven straight years... one of the longest runs in history. And after seven years, you might think that the big gains are behind us. You might think that you missed out. But that’s not the case. The Melt Up is a powerful idea... But few investors
Stocks often have their biggest, most explosive gains at the ends of major bull markets. In short, before the big “Melt Down” arrives, we have the big Melt Up. It’s the final push higher before the bear market kicks in. The most recent major example of this happened at the end of the 1990s bull market. The Nasdaq Composite Index soared more than 86% in 1999 alone. Now that was a clear Melt Up period. Importantly, the Melt Up typically begins after a time of extreme fear. In late 1998, stocks had
truly understand it. It’s based on a simple premise...
54 | June 2017
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