The Circular Bear Case

 | Apr 23, 2013 | 4:13 PM EDT
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I know the bears will never be satisfied with anything. They don't believe that new home sales can matter that much to the economy, but that's because they would never own a Toll Brothers (TOL) or a Lennar (LEN) or a Whirlpool (WHR), all of which are needed if we are running out of inventory, as we clearly are.

They would tell you that Netflix (NFLX) is just one big short squeeze and that there's nothing new happening there to speak of.

They would question the gains in the pharmaceutical stocks as simply being part of Bernanke's illusory shell game of free money.

They would laugh if you said retail sales are stronger than expected and that even the pre-announcers are doing better -- witness that Target (TGT) is now nicely higher after it pre-announced weaker earnings. They would say that the banks aren't really rallying, they just got oversold.

They would tell you that the gains in the insurance companies are unsustainable, because these companies will eventually have disasters they have to pay out that will wipe out their earnings.

They will tell you that Dr. Copper says we are all on borrowed time.

They would question seriously the idea that austerity will ever end in Europe, and they know in their hearts that if austerity were ever to end, it would cause growth, and growth would ruin their short thesis.

But in the end, if you undo all of these, and you have the Fed go against every single one of its utterances and start tightening tomorrow, you would go down maybe 5%-10% from these highs, which, alas, would then probably restart things and yet would still be well above these inflexible members of the bear intelligentsia. In short, you can't get in or outperform at levels they would like you to, now that we have moved up so high already.

Just something to think about.

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