Ever since the stock market bottomed in 2009 during the financial crisis, people have been coming up with reasons why the bull market was about to end. We heard every reason – Brexit, the end of Quantitative Easing, too much debt, COVID, etc. – and while we understood each may be a cause for consternation, we focused on valuations, which suggested the bull market would continue. Over time, math wins.

After the recovery in stocks from the 2020 lockdowns (and especially the latest surge in equity values) some analysts have been saying the US stock market is in a bubble, maybe even like the one it reached in March 2000. Some buttress this claim with the so-called "Warren Buffett Model," which says the market could be overvalued when total stock market capitalization exceeds GDP, like it does now.



Meanwhile, others are convinced that the social media fueled jump in some very small stocks (like Gamestop) and commodities (like silver) signal a building bubble.

But a bubble this is not. At least not yet. The Buffett Indicator is not reliable, the Reddit-fueled burst in some stock prices is very narrow, and signals more of a change in the investing market than any serious sign of fundamental issues.

The bull market still has further to run, and we stand by our year-end projection for the S&P 500 of 4200.

The Federal Reserve has the US economy awash in liquidity, with the M2 measure of the money supply up 25% from a year ago. Another very large fiscal "stimulus" package is wending its way through Congress, and is likely to hit the President's desk relatively soon.