Homebuilders

[Kingran]

@pauleckler

interest rates seem more likely to drift downward from here rather than rise some more

While I expect interest rates to come down, I don’t think that is actually needed for the stock market to do well.

@pauleckler

And the wind may blow the other direction at any time. Definitely not cast in concrete.

This pessimism is the reason I think we are going to continue to rally. Bull markets don’t die of old age or when there is widespread pessimism. Rather they die on euphoria.

I have discussed about market performance here, where you can see my reasons behind why an investor should be bullish. I am skeptical in nature, but I have to keep reminding myself to be optimistic.

Cash on the sidelines!

The below graph shows the funds in money market. From the below graph it seems $3 T is a steady rate, which climbed to almost $6 T. There is a lot of money moving in to MM funds chasing higher yields. [image] I am not sure how much of this will find its way back to stock market, if and when the yields start falling. However, in any sharp sell-off this could act as a PUT. The below graph is for the SP500 annual returns. In the last 96 years only 30 times SPY declined ( so it pays to be op…