It's phony. That's right, the whole ten-year bull market thing, it's full of hooey. Every Federal Reserve aided and abetted part of it.
I hate anniversaries involving the stock market because they tend to bring out people who sound skeptical but are actually nihilists. They use the event to remind you -- incorrectly mind you -- that the move is chimerical and don't you get caught up in it. The nihilists would always have you believe that these big moves are based on nothing except grand conspiracies between Federal Reserve Chairmen and Wall Street moneymen.
Not only that, but if you defend the ten years of "up" or "bull" or whatever you want to call it, you are one of them, a lightweight, lacking even an ounce of rigor who will be revealed as the charlatan they know you are when it all comes down.
One of the big reasons I have become so micro-focused over the years is that I find it easier to defend bullishness on a company by company basis even if it isn't as useful as saying buy /sell/buy/sell.
Think of it like this: On that fateful bottom in March of 2009 there were many individual companies that were actually doing quite well that had been taken down to levels where their stocks were yielding absurd prices relative to Treasuries.
Those were the real opportunities in the market. Matt Horween, my writing partner, and I would pore over stock after stock that had a yield north of four percent and figure out if there were any risk to the distributions of these companies. If there were big pension problems, if there was too much debt, we would eliminate them because the credit markets were frozen for those companies.
That eliminated a lot of choices that would ultimately pan out well. But it also gave us a list of relative-sleep-at-night stocks that I was able to put into my charitable trust that compounded for years and years in spectacular fashion. Other stocks, backed up by companies with no debt and great secular growth stories, such as Salesforce.com (CRM) and the cloud, were similarly attractive.
If you examined the market on a case by case basis rather than in the broad S&P 500 swath that so many want you to do for soundbite ease, you discover that there are these little engines called companies that can progress in a way that has nothing to do with the Fed and little to do with the emotions of the moment.
Think about it. If you go back in time what caused that bottom? It was Fed Chief Ben Bernanke going on 60 Minutes saying that he would not let any large banks fail anymore, a new position that, had it been articulated a year before, would have saved our country from the wretched consequences of bogus laissez faire policies and Fed inaction. If you had been in one of the real black holes, Fannie Mae (FNMA) , Freddie Mac (FMCC) , General Motors (GM) , AIG (AIG) , or any bank including the dozens that went under, you couldn't come back. But a Johnson & Johnson (JNJ) or a Procter & Gamble (PG) or a Microsoft (MSFT) or an Amazon (AMZN) ? Not a problem. Did the Fed aid Microsoft? No, Microsoft aided Microsoft. JNJ aided JNJ. Procter aided Procter.
We have gotten so far away from analyzing individual companies and so brainwashed that only ETFs, including the S&P 500, work, that a bottom on an average is far more important than a bottom on any individual stocks.
The fact is, though, a lot of individual stocks bottomed ten years ago because they had lost any contact with the fundamentals of the underlying businesses and the point of absurdity had, at last, been reached. It's the absurdity that we are celebrating and nothing more.
Salesforce, Johnson & Johnson, Microsoft and Amazon holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells these stocks? Learn more now.
