The Never-ending Bull

Like a bull charging the bullfighter’s cape, the stock market is on a rampage, flying through the air and through successive stock market highs at a frenetic pace. It seems like there is no end to the spectacle. One must be seriously impressed by the energy and stamina of this particular bull, as it is on a rampage like nothing seen since the 1990s. The market has gone vertical, as if gravity (or anything else in this world) has any effect.

The next question we should ask ourselves is, when will it end? Can we expect the stock market bull to last forever? Or will the bull fighter have anything to say in the matter? In my experience, the bull fighter (or its equivalent in this metaphor – the economy) always has the last laugh and wins in the end. What can we say about the current economic conditions? We observe that: 1) inflation remains stubbornly low, despite what the Fed desires or targets, 2) unemployment is at or near the lowest levels in history, and 3) asset prices, regardless of classification, seem to keep going up.

In order to protect ourselves, and our assets, from being negatively impacted by changes in economic conditions, we should tune in to what is going on in the world around us. We should keep a metaphorical ear to the ground, so that we are not surprised by sudden changes in the area we find ourselves in, regardless of where that is. Finally, we should remember one cardinal rule in bullfighting – the bullfighter always wins.