Bulls, Bears, Owls And Pigs

Everyone knows the distinction between a bull and a bear. There are enough conflicting indicators out there right now that a pretty forceful argument can be made for either position.

The Bulls are convinced that we've now had our one huge correction and every pullback is just a chance to buy more. The best is yet to come. After all…

  • The market recovered swiftly and conclusively from its 2020 lows. That shows that investors want to own American. We can get on with the party.
  • The dithering, withering Fed tells us printing money at obscene rates will lead only to temporary inflation. Don’t fight the Fed. (Even when they are wrong?)
  • Corporate earnings are coming in above forecasts. They will continue to do so as we power out of our Covid funk.
  • We have a federal government that wants to shower us with money rather than suggesting we really should get out of our yoga pants and get back to work.
  • We are likely sitting atop the biggest economic expansion in history. (Thanks boomers, and thanks millennials.)
  • It's the economy, stupid.

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Bears see the same information and interpret it a bit differently. Honest people can view the same event and interpret it differently without compromising their integrity. Bears see the same scenario and say no way can this continue. Because…

  • All this backing and filling and spinning of wheels shows the market cannot get out of its sideways digression. If it cannot go up, it will go down.
  • The Fed is on LSD. Their continued buying of trillions of dollars of bonds and dispensing goodies like a Bad Santa will soon bring all the current gains back to earth.
  • Of course corporate earnings are coming in above forecasts. Look at the dates of the year-on-year comparisons and remember the dismal despair of this time last year! The hurdle to beat is now so low that a 4-year-old could leap over it.
  • China wants to eat our lunch.
  • China is eating our lunch.
  • The supply chains are broken and inventories are too low to support continued expansion. Besides, China controls all the good stuff.
  • Trees don't grow to the ionosphere and no one has repealed the business cycle. Expansion and contraction are both real concepts.
  • The next generation of investors do not invest. They meme and moan.
  • It's the economy, stupid.
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Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in MANY over the next 72 hours.

Disclaimer: I do not know your personal financial situation, so ...

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Alex Johnson 3 weeks ago Contributor's comment

"The Bulls make money, the Bears make money - but the Pigs get slaughtered." - one of my favourite quotes.