The Bullish Case

I like to read commentary with alternative perspectives from time to time to keep my outlook balanced and to gain insight into thoughts I might not have taken into consideration. I might seem awfully bearish on equities, emerging markets, commodities and equities today but as I've said before I am very bullish about the long term global prospects for growth and innovation. If I could stomach a 30-50% portfolio drop in my investments and concurrently deal with any prospects of losing employment income, I'd just stick my head in the sand and wake up in five years. Because I suspect that is about how long it's going to be before we launch the next major assault on growth. I don't expect the world to come to an end and experience a five year recession but I expect we'll have alot of economic gyrating.

Of course, I could totally be wrong and equities might be on a new and sustained bull market for the next ten to twenty years starting in 2003. Ok, I guess I could be wrong but I'm not. The only issue is when not if we will have a devastating correction. I don't say that with irrational confidence. I say that because the bulls are irrationally confident. I don't mean sentiment surveys either. I mean from an underlying fundamentals perspective. Yes, believe it or not, fundamentals do matter.

I'm posting a link to Jeremy Siegel's recent article on Yahoo Finance where he outlines an overwhelming bullishness for equities going forward. The professor is obviously a bright guy and has published some interesting work over the years. I'm going to come back in a handful of days and give the professor an education in the Peter Principle. Obviously not a topic that is part of his finance curriculum at Wharton.