This stock market is incapable of going lower. This bull market may last for 20 years without a single 20% correction – a possibility given the endless liquidity, technological progress, blowout profits & earnings, globalization and the usual factors that have shown no signs of slowing.
Additionally, this is the second greatest bull market in the past half century in terms of gains and duration, surpassed only by the 1990-1997 one. To put that in perspective, in the last 18 months alone, the S&P 500 gained almost 66% of the entire 2002-2007 bull market, as denoted by the orange boxes:
Even more impressive, the total gains in the S&P 500 from the March 2009 lows – about 1200 points – is about the same number of points gained between 1995-2000, or what most people would consider to be the greatest economic boom ever:
But we’re actually in a greater economic boom than in the 90′s, even though to most Americans it feels like we’re still in recession. Maybe instead of an economic boom, a more accurate term would be a ‘wealth creation boom’, because GDP is still mediocre. The present macroeconomic backdrop is more conducive to further gains in the stock market than probably any prior decade in recent American history. Unlike in the late 90′s, valuations are still low and interest rates are never going up again. We have huge globalization, an emergent middle class of over 6 billion consumers, and technological progress that in the 90′s was only in its infancy. Multinationals and drug companies have more cash than they know what to do with, so they are merging and buying back stock. We have Facebook, Netflix, Twitter, Snapchat, and other companies changing the world and making their founders and investors obscenely wealthy in a very short period of time. A wealth creation boom that makes the robber barons and railroad tycoons of the 20′s look like pikers by comparison. Without equivocation, we’re in a new gilded age, but it won’t end in crisis or depression. Nope. It will keep going beyond anyone’s wildest expectations. People gaze in awe at the edifices erected as ostentatious displays of wealth and grandeur, like the Pyramids of Giza or the the Hearst Castle, but in space.