Let's just change it all up for a second. Think differently. This market has had a record run yet it never ever gets the benefit of the doubt. The whole way all we hear on air are questions about "what keeps you up at night," or "what are you really concerned about." Or commentators parade a list of horribles and ask which ones are most detrimental to the bull.
But what if we change the paradigm and talk about what's going to go right, or what are the risks to the upside? I see this in research sometimes when an analyst downgrades a stock and then lists what could go wrong with the forecast. Technicians do it constantly. So, after a bizarre non-stop rally, let's consider what could keep you up at night if you are a bear or have a lot of cash and fear missing the move.
First, earnings could continue to be as strong as they have been. We are concluding a remarkable earnings season and you can only conclude that our CEOs can manage pretty much anything that is thrown up against them including brutal supply chain issues and the Delta force. Healthcare, semis, industrials, banks, they all fared well.
Second, the Fed has to stay easy because Delta is decimating a largely union-free work force in the South and there are just too many businesses that are being hurt by COVID, especially small businesses that can't make it.
Third, there's a fourth trillion dollars on the sidelines as we learned about a new trillion dollars in money funds that can't really stay there given how little you make in these funds and how dividends just keep being lifted by companies that are also brimming with cash.
Fourth, the private equity firms like Blackstone (BX) and KKR (KKR) may have as much as a trillion that has to be put to work. There's really no choice and this money could supplant the lack of takeovers because of the new, tougher anti-trust division of the Justice Department.
Fifth, your stock could become a meme stock. AMD (AMD) had been stuck in the mud for ages waiting for the Xilinx (XLNX) deal to close and there's a substantial short position - long Xilinx, short AMD as the deal closes - and the memesters bought up AMD in a crazy fashion. You never know where they will strike though.
Sixth, Congress just keeps passing stimulus packages that put even more money into peoples hands while at the same time there are rent moratoriums giving people more room to invest some of those payments in the market. Rental property owners don't get any cash but the new cash of the renters can be more easily put into the stock market if the renters want to do so. There's no real law against. Meanwhile, the child credit pump even more discretionary money into the system, as if it even needs it.
Seventh, hedge funds that need the market down can't get it down and have to come in and buy something to keep up with the averages. Sure they could come down but not with one through sixth in play.
Such a discussion is the fairest way to help investors, Rather than freak them out they are more likely to give the market the benefit of the upside. That's what makes the most sense.
That's what should be happening.
(Advanced Micro Devices is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMD? Learn more now.)
