The Bull Case For Stocks

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In the wake of our recent amazing interviews with greats like Jim Rogers, James Grant, Ben Hunt and David Stockman – all of whom express great concern that today’s elevated market prices may undergo a sudden and violent correction – many of you have asked us to bring on a expert to challenge that point of view.

Which we are more than happy to do. To avoid the echo chamber risk, it’s essential to understand the positions of those who draw different interpretations as we do from the same data.

So, what’s the bull case for the markets from here?

Longtime successful hedge fund manager Glen Kacher, CIO and founder of Light Street Capital, courageously accepted our invitation to make the argument for higher stock prices ahead.

While he shares some of the Peak Prosperity audience’s concerns about excessive valuation multiples, the long -term risks of Federal Reserve intervention, and rising social inequity, Glen still sees a preponderance of factors keeping the environment beneficial for numerous sectors – particularly his fund’s main focus, Technology.

On the other side of the argument, our recommended advisors at New Harbor Financial remain skeptical that markets can continue rising higher for much longer.

They remind us that we are seeing many of the same conditions that have presaged substantial, sustained corrections in the past:

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So whether you agree with the bull outlook or not, now is the time to partner with a financial advisor who understands the risks in play, can craft an appropriate portfolio strategy for you given your needs, and apply sound risk management protection where appropriate:

Anyone interested in scheduling a free consultation and portfolio review with Mike Preston and John Llodra and their team at New Harbor Financial can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

SCHEDULE YOUR FREE CONSULTATION

This is a companion discussion topic for the original entry at https://peakprosperity.com/the-bull-case-for-stocks/

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  1. I’m just halfway through, and boy do I love this “free format” interview style, where you both just talk like you are at the dinner table. Glen really gives an inside view of what it’s like to be a hedge manager today. Really intelligent talk. Must be the “Cardinal” Stanford effect…
  2. At 13 min, he mentioned how his Fund letter gave the “blue wave” analysis and some of his investors didn’t like it. No wonder; prob didn’t like it because it was very, vary wrong. Nobody with brains I read believed the blue wave propaganda. Sure, nobody knew the result, but that the polls were slanted, shees, we saw this in 2016.
    Got more comments after I digest…
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  1. At 19:30, I LOL at Adam’s blunt, totally accurate comment about Apple revenues not matching their stock price action. Poor Glen having to bat that one back…his reply was err, well maybe 'cause everyone used to pay big bucks for laptops so now why not for a phone? And BTW Apple has lower revenues in the service market…err…that don’t work…
    I’ll give Glen an A++ for getting something out on that impossible to answer Q. Hey what are friends for, anyway?
     
     
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Glen’s comment about using a 13F to learn more about fund managers may be obvious to him and Adam but I’ve never even thought of it, let alone done it. Me = fool. That may be a lifetime-changing piece of advice for me. I swear I learn something new every single time I tune in here.

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Adam, I really appreciate your weekend podcasts. Further, I do respect you and the gentlemen that join you every week with their comments regarding the market and I have enjoyed very much your guests.
I further understand yours and the expertise of the gentlemen who manage the money of others.
Every week the theme is the same, for a long time too and for years. The crisis expected has not happened for years, 12 years now. At what point can we acknowledge that what should happen that hasn’t may be amiss because I’m saying that all I have seen by not fighting the FED has been a consistent rise to prosperity just in time to retire. I would have been terribly depressed if I lost this opportunity to make Barb’s and my life set without making another dime. I am very happy that I followed my own pathway because something isn’t being accounted for that literally would have caused me to miss out on the monumental gains if I were so inclined to follow this risk and did nothing at all as far as being in the market the last 12 years. I’m thinking that all the stocks in the universe may be priced wrong and may be repriced because all the market does is rise with every dip. I have no clue but I do know as it has been proven over the last many years that risk has been on and something is amiss with the data. Still, I will be watching.
Respectfully Given but, it could be years still before we get the correction that has been counted on, backed by the data that so far and for so long has been incomplete. Of course I will stay diligent, assume nothing except I will still follow the trend.
Now that we have a Vaccine the profits made today are off the charts, the economy can now open completely. We can now plan to be back to normal as part of our future plans and for all of this I am well pleased. The greatest day perhaps in my lifetime. I get to hug and kiss my grandson’s again and they are about to get the BIG kiss and firmest hug from their Grandpa and it will be a very emotional moment for me. I assure you of this so all is good today. Peace
…PS: for the record, I firmly believe we must make strides to control the population. I’ll take one billion if I could wave a magic wand. However, that isn’t reality. What should be done is to educate and remove 7 billion people over time but, I don’t see this as reality either without bad decisions being made, especially if we want it done within 1 hundred years, 2 hundred? People are living longer so 3 hundred years!? What I hope is that we can educate and hope that for starters we can get to one newborn per family unit. I am sure that you and your Lady early in your marriage as Barb and I did was to plan zero population growth by having two children. I just don’t want governments ever to decide for anyone that it would be against the law to have children as they attempted in China. I did and you did the responsible thing and still we could be viewed as being non compliant to what we must do. I often think: which one of my son’s do I give back!? There in lies my issues. I am positive you are a wonderful Man, husband and father. We should all be so lucky to have what we do. I just hope we can achieve the lessor population over time but, it will be a long time to come. I won’t comment on this subject again, I just want you to understand my issues with it. Respectfully given

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One of the great things about Adam’s series of stock market interviews is they are willing to explore all positions, even that stocks are not insanely overvalued (due to the Fed, debt, and now ZIRP). But none of these theories that explain the overvalue also explain why the “buy index” and “avoid value” model works so well; why wouldn’t the Fed action raise all stocks equally?
I bring this up because I’ve been studying this issue for well over a decade, only to eventually reject the common “Fed, debt, ZIRP” thesis of overvalue. But I’ve not heard a single guest here who has a theoretical model that both describes and predicts future price action. Yes, everyone with a brain agrees stocks are overvalued. But why? If we know this, we can profit from it with ease. Yes, it’s easy to scream “Fed” or “Tulips”, but upon consideration these simply cannot be the primary truth. If this were so, the results would be different, with value matching or even outperforming growth. Yet we see the opposite.
IMO within a few years there will be widespread acceptance that the dominate reason stocks are powering higher with no end in sight is that index funds, which got above 1% around 2000 which started the tech bubble are now getting close to 50% of the entire market capitalization. Boggle predicted this would create chaos and mayhem. The iterative mathematics of how the loss of active managers also show this.
Bottom line: Today most stocks are bought and sold on one simple algorithm: Do you have cash? Buy everything! Do you want cash? Sell everything! There is zero consideration of the “value” of any stock. Hence Tesla (just like Dell back in the tech bubble when this whole thing got started). Yes, it’s the same bubble as 1990, just morso. And this means an endless insane bubble with continuous crashes, until the whole thing melts down. It’s just basic mathematics, and has been predictable for the last decade.
I would be great to get somebody on Peak Prosperity to talk about this. Mike Green of Logica is too big a whale, but there will soon be people who figure this out; when this happens please grab one of them. This thesis, in addition to being true, has the advantage of fitting into the Peak Prosperity worldview. I got the memo back in 2009 and it’s been a never-ending-cash-machine with very reasonable risk. We need this interview!