Well, the S&P 500 is one full per cent below its all time high....
So, after its QE induced levitation of more than 200 per cent, the stock market has corrected by an all but invisible one per cent. The backdrop to this is the weakest post WWII economic recovery, not to mention the highest valuations ever, the highest public debts ever, highest stock market margin debt ever etc. (the full evidence will be presented in a future post, as well as my thoughts as to why the market has appreciated so much the last 5-6 years).
Do you think the correction is over yet, with Market cap/GDP ratios well over 100 per cent above normal valuation levels and at their highest ever? Yes, there still are some (less reliable) valuation aspects, where the peak of 2000 beats the current peak - but shold that epic peak and eventual epic crash be the benchmark of choice?
Just looking at a chart it should be obvious that there hasn't even been a correction in the market the last couple of years. It should also be evident that the current 5 year stretch of unbroken positive returns is a historic anomaly, not to mention that we have in just the last 15 years seen similar stretches end with disastrous downturns.
It's about time now again. Just because the central banks have succeeded in fooling a lot of people for a couple of years does not mean they have ushered in a new era of constantly rising stock prices, or "a permanently high plateau" for that matter :) as was believed by the most prominent economists in the fall of 1929.