The bull market is one year old. Can it last?

[LennG]

Last year, at this time, anyone who had money in a retirement account, ANY account that is in the Stock market, were pulling their hair out and thinking that they may have to work till they are 90. We were going on a Trans Atlantic cruise, leaving March 1, and while we were sitting in the cruise terminal, waiting to board and knowing we would be out of touch for the next 2 weeks, I was desperately trying to reach our 'advisor' to see what we should do. Finally, as we were boarding, he called me, told me to relax, enjoy the cruise and things will be back to normal very soon. We did follow his advice and look at the run the Bull market has had since then. I know we are pleased. Our investments are pretty low risk, so we may not lose as much, but we also won't become millionaires either. So, is this going to end anytime soon?

https://www.nytimes.com/2021/03/24/business/dealbook/bull-market-bubble.html

The bull market is now a year old, with the S&P 500 up nearly 75 percent from its low point at this time last year. That recovery, The Times

[Bob In PA]

I already replied (apparently when the thread was moved my reply disappeared).  I think I can remember it all....  If I say "Yes" that alone will kill the bull market LOL so I'll say "no" it cannot last, absolutely no way....     

Tech and tech-related stocks are seriously overvalued. A recent semi-correction in tech was healthy, but IMO not deep enough to be out of the woods.  Also, market leadership is changing, which is a good thing.

The tale will be told in 2 to 3 weeks as the high-fliers report earnings. If they get to the end of April without big damage (or bad covid news) I would seriously consider taking at least half of the profits off the table.

Bob

[DaveBrown74]

I'm sticking with it myself. I figure if it dips, that would be a dip I would want to buy, and I don't like to overtrade. Plus there may not be a meaningful dip.

With the Fed printing money in the scale and at the pace that they are, there is no surer way to get poorer than to be sitting meaningfully in cash.

[Bob In PA]

Just a quick note, in case anyone else is paying attention to this thread, to say that as of today 4/14 the "official earnings season" has begun for this market quarter-year.  Bob

[Ed Vette]

The Fed Chairman was very Bullish and although they are closely monitoring Inflation they don't believe it will hit a sustained 2% anytime soon. I believe that the economy will gradually shift and some will fall as others rise. I get concerned when 5 stocks comprise over 25% of the S&P 500. A lot of jobs will be created with Infrastructure and Renewables.

[Blue4Life]

This is not your father's stock market, past history really doesn't make that much difference. Yes, whenever there's a bull-run for a longer period, people will call in the bears, that sooner or later will come.

As DB74 stated, the feds love their printers and most of that money went to corporations and rich people. That in itself will sustain the stock market. I don't believe that there will be a full blown bear market, but could have some adjustment in this or next month. With that stated...

My portfolio is stocks, mainly tech stocks. In order the protect it, I've sold half of each stocks in my portfolio at anywhere from 300-600% gains. If the bottoms drops out, I'll just buy back the same stocks and augment it with some other stocks that I've been monitoring. The price of the stocks way too high at the moment, I would not buy them now, even if they continue gaining/increasing their prices. Maybe after some adjustment buying stocks will be an option.

About tech stocks... Quite of few of them reported record income/profits last and this year. You do need to know the sector to pick the right stock symbol, don't just jump in, do your research...

[Bob In PA]

B4L: Is it just a coincidence, or is the timing of your current (ongoing) sell strategy related to the old Wall Street adage "Sell in May and go away"?  Bob

[Blue4Life]

B4L: Is it just a coincidence, or is the timing of your current (ongoing) sell strategy related to the old Wall Street adage "Sell in May and go away"?  Bob

It is just coincidence, pretty much a standard process for me year around. Locking in the gain, or just some of the gains, allows me to play with the "house's money". This does require evaluating the company's business, read the so called "experts" projection for the stock and act accordingly. It's not fool-proof, but setting "stop-loss" can minimize the loss. On the other hand, setting "stop-gain" at the time of purchasing the stock will prevent becoming too greedy.

I've got burned couple of times, especially a good while ego when started to trade stocks. Live and learn as they say and establish your own method for minimizing losses and prevent getting too greedy.

[Jolly Blue Giant]

There has been considerable change in the market since the latter part of January, early February. If you were in tech stocks, you probably took a beating throughout March. I don't know if the GameStop fiasco caused the shift, but something put the fear of God in the big investors - and it wasn't the sudden rise to 1.5% ROI in the bond market. The correction took down a lot of up and coming technology companies like Plug Power and QuantumScape with 50%+ drops overnight. And of course, there was a change at the White House that threw uncertainty into the mix as the changes make it appear that heavy inflation is in the future - which in turn caused the bond market to rise. But of course, who wants to tie up their money in bonds that will return less than 2% if inflation kicks in many multiple times that? 

In the past, stocks were trading at a premium regardless of whether they had revenue or not and regardless of their PE ratio. Now, with the correction in the rear view mirror (knock on wood), the "corrected" tech sector should be back on track - just not so wild. However, I would avoid companies that show little or negative revenue and a high PE ratio as many players are changing to looking at "value" rather than getting caught up in the next newest technology. There just won't be as many 200-800% one-year returns with so many stocks like there was in 2020. If you had a few thousand in Tesla last year, you were golden and probably more than quadrupled your wealth in your portfolio. Now, it's getting really weird out there. Some say Tesla is going to 3,000 dollars - others say 1,000 - and many others say it's so overpriced it is due for a major crash. Dittos with cryptocurrencies, EV stocks, Pot stocks, etc. Will BitCoin go to 100k, or will new regulations cut it in half? No one knows. Tread carefully!

[Bob In PA]

I had intended (but forgot) to make a post "announcing" what even the casual investor probably knows... we are now in "earnings season."

Early next week Microsoft will announce, as will several many major players in major industries, followed in the next two/three weeks by the brunt of all major and minor companies.

IMO, the market's reaction (to both good and bad reports) will tell us what to expect from the over-all stock market for most of the remainder of this year.

Bob

[Jolly Blue Giant]

I had intended (but forgot) to make a post "announcing" what even the casual investor probably knows... we are now in "earnings season."

Early next week Microsoft will announce, as will several many major players in major industries, followed in the next two/three weeks by the brunt of all major and minor companies.

IMO, the market's reaction (to both good and bad reports) will tell us what to expect from the over-all stock market for most of the remainder of this year.

Bob

Good point. However, I can't tell you how many companies came back with "higher than expected earnings", whose stock fell 10% the next day. It's very confusing. Market is extremely volatile and it's hard to know where to go. I bought a couple thousand bucks in SKLZ (Skillz) for no other reason than I read in Barons that Cathy Wood (of ARK investments) bought a few million shares and she has a reputation of getting high returns. The next day it went up 33% and I sold my shares and banked the profit. Revenue is in the red and the shares were down from a high of 43.72 on February 5th, and was at 12.55 a share on April 20th. It's now about 19.00 and I don't dare buy back in even though ARK doubled down and bought more than a million shares after the 33% bump.

Regardless, I am aware that companies have been releasing (or preparing to release) their quarterlies, but it almost seems as if it has little to do with things - especially when I see a profitable up and coming technology company surprising analysts with higher than expected earnings only to have their share price dive the next day or stocks with negative revenue going up 

[Bob In PA]

I can't tell you how many companies came back with "higher than expected earnings", whose stock fell 10% the next day. It's very confusing.

Jolly: That was the point of the third line of my post.  There are, of course, three possible earnings reports: better than expected, as expected, and worse than expected.

And there are three market reactions to each type of report: the stock goes up, it goes down or the price basically seems to ignore the reported results (good or bad).

Usually, once "earnings season" ends, the bulk or reports favor one of the three (and so do the bulk of reactions) so there are "tea leaves" to be read concerning the approximately next six months of stock activity.

Bob