There is an old saying on Wall Street: “Once a cat sits on a hot stove, he won’t sit on a cold stove either.” Investors have been slammed so many times in the last decade that they are convinced that there is another crash coming. From the Wall Street Journal
Like Lucy with her football, forever enticing Charlie Brown to one more kick, Wall Street is waving at Main Street yet again and shouting, “Have a little faith—try me one more time.”
The Dow Jones Industrial Average this month briefly crossed 14000, for the first time since the boom of 2007.
For the broader Standard & Poor’s 500-stock index, the recent surge is even more historic. The S&P, which touched an ominous intraday low of 666 during the crash six years ago, has surpassed 1500. The first time it broke that barrier was April 2000—the peak of the dot-com era bubble.
Since then, the market has collapsed twice and recovered twice. Each time, the S&P 500 has made it just over the 1500 line before plummeting. Will this time be any better?
Our crystal ball is broken and we have no unique insight into the future of the markets over the near term, but we believe that after more than a decade of marking time, at some point the markets will head for higher ground, permanently. And that will be just about the time that Charlie Brown decides that he’s never going to kick the football again.