Even though I have been minimally invested for the entire rally, I am underperforming by about 1% Year-To-Date. All of those sleepless nights I missed because I was in cash… The fact remains that the S&P 500 is only at 900 and has to get back to 1,550 to recover its old All-Time High.
My accounts are at or within a percent or two of their All-Time Highs. I can sit out the next 600 S&P points (a 67% gains from here) and still be ahead of the game –that is not going to happen, but illustrates how much catching up the markets have to do with those of us who know how to manage risk.
The NASDAQ is now up 8 weeks in a row. There have been 5 longer streaks since 1985 (3% of all sample sizes). I think that puts us 3 Standard Deviations away from the norm and that always leads to a nasty reversion back to reality.
Maybe this time is different (but it’s never different). It’s simply a question of when, not if.
One question I will ponder tonight is as bad as Massive Inflation would be, what if Deflation wins?
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