“Bull markets,” said legendary investor John Templeton, “are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.” The equity bull market started in October 2022 and is well under way, although it is further advanced in the US. Market sages are in denial, having warned of a recession that would dent stocks, but it has failed to appear. Ed Yardeni of Yardeni Research likens them to Vladimir and Estragon, the characters “waiting for Godot” in Samuel Beckett’s play. Godot never turns up.
The sceptics point to the narrow base of the bull market. The “MegaCap-8” of the US market (Apple, Amazon, Alphabet, Microsoft, Meta, Nvidia, Netflix and Tesla) fell by 41% in 2022, but have since rebounded by 64%, so their share of the S&P 500…