The Only Thing We Have To Fear Is Fear Itself


Quote for Today:

 “The only thing we have to fear is fear itself.” 

– Franklin Delano Roosevelt in his inaugural address in 1933

(Source)

Yesterday’s Market Sum mailing from Investopedia was an interesting read filled with optimism overall. It does acknowledge the bubble, mentioning “markets at or near record highs, stretched valuations, and rising long-term bond yields.” But it adds that those “are still not enough to knock the shine off of equity markets.”

That assessment does appear correct for the time being. For my part, I’m not a market timer. I’m an analyst. So I can get onboard with its summation of Morgan Stanley’s idea that the equity markets have “diminished somewhat over the past few weeks as rates have climbed higher, but many of the catalysts that favor the equity markets are still in place.”

And here are some other positive pronouncements the e-letter included:

  • 66% “of companies that provided guidance during the fourth quarter guided numbers higher. That percentage is significantly higher than the five-year average of 33%.”
  • Janet Yellen says higher taxes and fiscal sanity are coming, but later down the road. For now, more stimulus is the name of the game – something the markets are right back to being happy about.
  • Morgan Stanley sees a new business cycle and bull market starting right now thanks to that government spending. “There is simply a lot of liquidity in the capital markets due to historic government spending, and it’s not causing rampant inflation – at least not yet.”

Over here at Wide Moat, meanwhile, I’ll still be looking at numerous factors in any potential purchase. They all boil down to two categories: fundamentals and valuation. If those two don’t mesh, then my money will not go into that stock.

It’s as simple as that.

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Brad Thomas is the Editor of the Forbes Real Estate Investor.

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