Can we really go higher?
Bullish Sentiment is literally off the charts and only 7,826 (11.4%) out of 68,119 investors polled by Earnings Whispers are currently bearish about the markets. Usually you might thing that's the sign of a turn but if my daughter's softball team were going up against the Yankees, you might see similar sentiment results in favor of the Yankees and that does NOT mean betting against the Yankees is a smart move – just because it's the contrarian play.
Sometimes, the crowd gets things right though not this time – this time the crowd is full of idiots who are chasing a trend off a cliff but other times, you shouldn't just be a knee-jerk contrarian. Meanwhile, as I've been saying since Nov 29th's "Record High Wednesday – We Will All Be Billionaires," if they are going to keep giving money away in the markets – who are we to turn it down? The Money Talk Portfolio we looked at that morning was "only" up 70.7% for the year and, this morning, those untouched positions are now up 80.9% less than two months later.
We cashed our other portfolios in and started new ones on Jan 2nd and our $500,000 Long-Term Portfolio is already up $25,000 (5%) in 3 weeks – a pace that will make us $1Bn in 14 years (at 75% annualized) and of course that's ridiculous and unsustainable but that's what you are paying for when you buy into a market that is basically up 5% for the month as well. While earnings are "pretty good" so far, they are (as I mentioned in yesterday's Report) bolstered by a weak Dollar as well as the stimulus of a $1.5Tn Tax Cut, which consumers have already borrowed against to spend last Christmas.
Looking forward, we are now counting on the repatriation of Trillions of overseas Dollars to boost the markets into 2018 but, just like the rising income inequality in America, the benefits of the repatriation are concentrated to the Top 1% Corporations and, in fact, just 16 companies account for half of all overseas funds: