Stock futures are flat on the last day of 2020. Finally.
I'm sure most would call 2020 one of the most trying years of their lives. I don't think I have to describe 2020. We've lived it.
What matters now is 2021. 2020 is over.
What is 2021 going to look like? We are heading into 2021 with the stock market at record highs. It just can't go any higher right?
Maybe the top is finally in? Perhaps we've just witnessed the highest price the S&P500 will ever trade for.
I doubt it. Calling a top in this stock market has been a fools errand.
Since the dawn of man.. the stock market has always gone up. It may correct, it may collapse. But over the long haul.. it goes up. And when the day comes when it crumbles to the ground... it dusts itself off and moves higher.
Every dip we've seen gets bought... sometimes shockingly so... like when the entire global economy was shutdown from a once in a 100 year pandemic. Buy the dip has been the right call.
The stock market has always been right. It's smarter than me, than you, and all of us combined. We don't have to like what the Central Banks are doing to be long.
There are more than enough reasons why this market should be a lot lower than it is. I could find a chart... throw some ugly inicators on it pointing out who we are ripe for a market crash... and you know what? it's going to get a lot of likes on Twitter, retweeted. But at the end of the day its been wrong.
The last two times this indicator was this high.... 2000 and 2007... pic.twitter.com/J6vPNJ1zGD
— UPBOptionMil (@UPBOptionMil) December 30, 2020
And of course using 2000, 2007 or.. gasp... 1929 as a comparison brings in that wow factor.
If you didn't hear Jerome Powell earlier this month after the FED meeting. Listen to it. Read it... Soak it in. I found it to be revealing.
I'll sum it up. In my opinion. If someone asked me what I got out of Jerome Powell that day... I'd say that stocks are going a lot higher.
The stock market is going higher. There I said it. Sure its going to have corrections... pull back... crumble even.. but its going to dust itself off and come back, usually a lot stronger than it was just before it fell.
So for 2021? Stocks just can't go any higher right? I see Doug Kass calling for sideways action and then a second half collapse. The same Doug Kass whose big prediction heading into 2017 was to to short the QQQ. His rational for the short? The QQQ was up a lot already!!! Really?
You can see whats wrong with a lot of the shorts. Just because something is up a lot, doesnt mean it cant go up a lot more. So the $QQQ was at $100 when he said it was up a lot the prior year. Where is the QQQ today? over $300... a lot more... and I think even more is coming in 2021. Why?
For one I see a lot of bubble talk. Amazon was a bubble years ago at $200... no profits.. it was losing money every quarter. And now its everything the stock price was telling you it was going to be when folks were calling it a bubble.
Same with Tesla. It defies the logic of the shorts. Those saying its up a lot already. They don't understand Tesla. They don't under stand why the stock is up. Why it defies their calls for downside.
If this market is a bubble.. .but everything else is a bubble too.. is the stock market really a bubble. I think it was two years ago when Marketwatch was calling the current environment the 'everything bubble'
I think that's the case still. Its an everything bubble. Housing, bonds, stocks, art, collectibles. bitcoin Tesla, Amazon, google, sports gambling.... and its all relative. It's like having every team in the NBA be great.
you know what else it a bubble? Money supply. Its a huge bubble in 2020. Money supply exploded! Where is all that money going to go? Into the everything bubble. Think of the money supply as the ocean and everything as boats. More money supply... boats rise. It's been as simple as that.
If the money supply is exploding.
The everything bubble is expanding. Then all boats will rise?
That's whats been happening. We have 40+ years of interest rates trending lower. And we have money supply exploding. With more money being printed as I type.
A Covid relief bill of almost $1 trillion.
So... let me cut to the chase as the opening bell looms on the final trading day of 2020.
Jerome Powell just a few weeks ago said.
- PE's aren't high in this zero percent interest rate environment.
- He's not going to be concerned about inflation until he sees a long lasting rise in prices
- Not concerned at all about home price records
My take. Stocks are going much higher.
I think in 2021 the bears continue to throw the market crash narrative at the wall hoping it sticks... but knowing the reality of the situation deep down. As long as the FED keeps money cheap, and money supply keeps growing... stocks will go up.
While calling for a stock market crash may get you all the likes, followers, and retweets on twitter, since the dawn of man calling for the stock market to trade higher has been the right move.
A Happy and Safe New Year!
Stay Tuned for JBs stocks for 2021.
And I'll have some stocks to watch into 2021 as well.