Still Bullish After All These Gains

Sung to the tune of Paul Simon’s “Still Crazy After All These Years,” I am still bullish after all these gains.

Stephen writes:

You reported over the weekend that your permanent portfolios are up 29%, 14%, and 14% since your bullish call a month ago (wow!). My question is, Am I too late to the rally?

I’m afraid he’s too late for the excellent start to the rally but, no, the market is not done yet.

If you’re determined to get in a little cheaper than the levels we saw last Friday, then wait for a slight pullback, but not too much of one. If you wait for doubts to dissipate entirely, you’ll wait forever.

For instance, I found this on The Capital Spectator:

The Fed cut rates because it perceives the odds have risen for an economic slowdown, if not worse. If that’s good for stocks, how does one explain the past few years, when the Fed raised interest rates in the face of a strengthening economy? . . . Some trouble makers are starting to use the phrase “sucker’s rally” to describe the action of late. . . . If now’s not a good time to cut back on equities, particularly U.S. equities, when might such a moment come? Call us crazy, but selling high and buying low is still the only game in town. Beyond that generalized view of money management, the devil remains firmly entrenched in the details.

What a lot of folks missed, and won’t admit, is that the time to have bought low was a month ago. The time to have sold high was early in summer, when I advised caution over the medium term.

I’ve analyzed my reasons for being medium-term bullish in recent articles and in The Kelly Letter. In this short installment, I’ll just say that the reasons still apply, that you should ignore the bears, and that this is a time to be getting in — not out — of the market.

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