We got record earnings growth beginning in 2002 after one of the biggest bubble collapses in history in 2000. Just wait until the next recession when earnings growth turns negative again, and people will understand that earnings don't always grow 15 [percent] to 20 percent.
The shorter the time until maturity, the less impact rising rates will have on bond prices.
That's perhaps why October has this stigma.
We are starting with stocks fully valued and short- and long-term interest rates still hovering near four-decade lows. Large bull-market moves are generally accompanied by, or preceded by, declining rates, and we don't have that scenario today.
In a maturing bull market, expectations are usually running at high levels for both economic growth and corporate earnings. And the higher the expectations, the greater the room for disappointment.
Of the 14 bull markets in the S&P 500 index over the past 75 years, fewer than half have lived to celebrate a fourth anniversary.
We're tending to steer towards those sectors that are going to benefit from an economic recovery.
The good news is that most of those that made it through three years did manage to extend another full year.
And the value of these unsold homes in the U.S. now exceeds (a) half-trillion dollars -- up 33 percent from a year ago!
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