Market's Win Streak Must End, but Down Isn't the Only Option

Getting to Mars is a problem; figuring out our present stock market trajectory is a mystery.

Practical wisdom says market winning streaks must end sometime.  I would enhance that by stating an end of a winning streak doesn’t necessarily imply that the only way is down for equities.  At least that is the way it has been going for more than six years.

Quibbling market experts with free time on their hands talk about equity headwinds including overly-aggressive earning-per-share estimates, exhausted global central bank policy, and the ever-growing accounting gap between GAAP and non-GAAP methodology as being the catalyst to finally take the stock market down. Bulls speak in terms of expectations, not accepting the finality of the present, feeling confident enough that any ill effects of U.S. dollar strength and oil weakness are behind us, that real global GDP continues to plod along while employment reports and global core inflation numbers suggest expansion not contraction.

While navigating through the present mine field of information, wrestling with the reasons on why U.S. bond yields deserve to be near historic lows or the stock market near historical highs, allow me to present some of the best investing knowledge I’ve gained after sorting through hundreds of pages of estimations, predictions, and other severely off-beam conclusions.  The challenge for investors is always the wisdom in the answer – not simply the answer.

• Financial analysts, economists, and the like have the choice, the prerogative to stop their research once they have the desired result.
  
• Observing facts we must ask why they are considered significant.