ONE CHART, WHY WE ARE NOT IN BUBBLE YET

Many big and smart guys, not only small investors, have huge concerns about this current market rallies. Just think about David Tepper’s warnings two weeks ago at the SALT conference in Las Vegas. Here is another guy from yesterday Steen Jakobsen, he is the Chief Investment Officer of Saxo Bank, stated “I am confident on is the fact that the second half of this year is going to see a 30% correction from the top.”

I fully doubt that. I do believe this market is not yet in bubble, the bullish pattern is still healthy and I don’t expect any relevant bigger correction this year. Most of the moaning guys are that sceptical because the market has been coming up too much. Yes, true the bull market is in its 5th winning year in row, but I guess the stocks still have room to gain more.

The chart (by Bespoke Investment) brings a clear evidence that US market could be bullish further easily. Over the last ten years, the SP500 is up around 65%, this might seem too much, but benchmark index’s average rolling 10-year return since 1937 has been 103%, so the current 10-year gain of 64.8% is only two-thirds of that average. That chart suggests the bull run most probably will continue.

The BFM Assets Team.