Sunday, January 19, 2020
Last year, the S&P 500 rose by 29%, the NASDAQ by 35%, and the Dow Jones Industrial Average by 22%. Middle-class Americans are increasingly reliant on their 401(k)s and pensions to live comfortably during retirement. Millions of other Americans depend on college-savings funds to help pay for their kids' educations. And even those without a stock portfolio benefit from a vibrant market, which generates profits that are invested in hiring, innovation and salaries while helping move money from unprofitable sectors to more profitable ones.
Actually, I think the case that the rise in the stock markets is an asset price bubble maintained by the bafflingly low interest rates promoted by the Fed and PDT even more so, is pretty strong. Whether this bubble will pop next year or ten years from now, I don't know, and nobody else seems to either. I suppose one could buy a bunch of puts, but that's very expensive, as one would expect it would be if lots of people thought it might happen.