Saturday, November 8, 2014

Is the bull market coming to an end?

Lately, after seeing the various stock indices hit their historical highs even amidst the news that the Fed's QE was coming to and end, I started wondering whether the bull market might possibly be coming to an end. One certain sign is the number of people who are probably interested in the stock markets again. We all know for a fact too that this bull run has gone on for some time now. So is this bull market coming to and end?

Some points I consider:

  • Unemployment rate in US has improved but is still worrying in Europe.
  • Federal Reserve stopping QE but ECB and BoJ are maintaining low interest rates.
  • China growth story seems intact.
  • Stock market still trading around historical P/E ratios.
  • Oil prices are low which ought to be good for businesses, no?
  • Investors' interest in stock market and their sentiments.
  • Low gold prices indicates fear of inflation or hyperinflation is probably low.
  • "THIS TIME IT IS DIFFERENT" syndrome has not appeared.
From a very rudimentary analysis, it will thus seem that the bull market still has some legs to go. How much longer is anybody's guess. Probably till 2015? What do you think?



2 comments:

  1. this market reminds me of the heady days of 2006, when the world was hopped up on goofballs and the ones with more mental clarity were but a minority starting to call the crash. i think we will still be stuck in euphoria stage for a good half a year more but the bull charge is on its last legs.

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  2. Hi ladykiller,

    Agreed. The euphoria stage is probably just at its start and will probably last for a little while more before this bull market comes to its end.

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