Maybe the Bulls Are Right

I've been generally cautious on this multi-month equity rally but, like all good investors, I am keeping an open mind to the opposing case. My concern has been that the lurch upward hasn't been accompanied by anything other than mediocre fundamentals. If stocks are rip-roaring higher, I want to see earnings getting substantially better, for instance. Instead, earnings are stable at best -- and rising interest rates do not auger for higher valuations.

However, one key point I often make is that the stock market is, in reality, a barometer of precisely current conditions. Often a move in a stock or the broad market seems mysterious until later -- when, for example, a company reports great earnings or a takeover is announced. Current information is leaking into the market at a constant rate, so the rally could be reflective of earnings trends that will become apparent only on first-quarter earnings calls in April or May -- or maybe not. But we investors must be open to that possibility, and recheck our theses often....348 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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