Its Not going to End Tomorrow!

We will see pull backs like we had last week from time to time but for the moment the end is not here. I had lunch recently with some former co-workers and no one felt comfortable being bullish on the rally -- they all expect a sharp downturn in the market to begin at any time. Asset flows for mutual funds? only if you want a bond fund. I just saw another comparison to 1929 and the big rally that occurred before the bottom fell out in 1930-1933. This is great news for the market -- as long as the wally of worry exists the market can keep rising. When everyone expects the rally to never end and that stocks are the place to be, that's when the end comes. We are so far away from that its not funny.

A few other reasons the rally can end:

the fed raises rates or stops the flow funds into the economy;
the chinese decide to raise the value of their currency vs. the dollar dramatically
the leading indicators on the economy roll over and point to a slow down.

I don't expect any of these to really happen until next year at the earliest -- plus just because the fed starts to raise doesn't mean the end is nigh -- it took a few years from when the fed first raised rates to when the rally ended. if they raise rates faster than obviously it will take less time to end the rally but I think the Fed's fear of pulling the plug too soon and leading to a fall back to the next depression will keep the money flowing.

MXWL -- they announced a deal with Continental to sell lots of ultracapacitors to the auto industry -- this market is just getting started. the stock is likely expensive having run up a few dollars in a matter of days but its one to keep an eye on. This market will be huge -- ultracapacitors will be a key to transitioning the market towards more electricity use within cars.

ERII -- if this stock pulls back towards 5.50 again, I plan on putting on a good position.

TCAP -- actually raised their dividend -- do the same as ARCC. Both have been great stocks -- ARCC is closing in on its NAV from Q2 but that NAV is likely 10-20% higher due to the improvement in the market. we'll see when they report.

BTW, not saying you can't take profits, raise cash or start a short position to hedge yourself given how far we've come. I just think we are going higher. 2003 we paused for several months around these levels. quite possible that happens again.

MCD -- interesting they raised their dividend to a 3.8% yield -- that seems like a high yield to me for this kind of quality company. lots of chinese and indians need to be fed.