Thinking about the future keeps me up at night....

So the markets have just been rampaging lately.... and maybe i'm just a big worrywort but I've got to be honest, I don't think we are there yet. I don't think that this was "the bottom" and I'm not sure if it comes later this year or in a couple years but I have a really bad feeling about things. Let me explain my thoughts really simplistically

You need to ask yourself several questions... How many businesses have gone out of business/bankrupt? I say NOT MANY. So you are telling me that with all of this carnage and hoopla in the media there are that many companies with ugly balance sheets barely surviving? I thought a recession was supposed to filter out the weak companies, and have the strong companies replace these. That is not happening yet....

While this recession has hurt many people, have their spending habits changed that much....I'm not so sure about this either. I was reading that something like 85% of people surveyed believed that this would only be a mild recession. That worries me. People for the time being seem to be more concerned about missing out rather then protecting themselves- that isn't a wall of worry at all. It is a recipe for disaster...

Then there is the Slope of Hope... and I really like Obama. I took the day off just to watch inauguration and I live in Canada. But how can his popularity be at 70%..... I'll tell you how! People are looking for a saviour to come and rescue them from all of their problems, and Barack is the one that they chose. I think that people really believe that he can fix everything.... I don't think he can. I think he will be able to do some wonderful things socially for the US but I don't think he will be able to turn the economy into a sustained new bull market. Why do you ask? The market has been in a relentless bull market uptrend for the past 20 years or so....look at this chart... of the S&P for the last 80 years. Something has really changed here....or is JUST STARTING TOO.

In a few years I honestly wouldn't be surprised to see the S&P at 400 ish. Nobody believes that can happen.....and that is what scares me. Wealth and Prosperity has almost become like entitlement in North America. People believe they are entitled to it, and they expect the government to deliver it.

Imagine what would happen if Barack managed to make people believe there was a recovery coming (and at some point there will be one, just not sustained I don't think) and it actually
became worst. I think there would be civil unrest on a large scale... if you look at other instances in history this has been the case. And human behaviour I have learned doesn't not change.

Like I said maybe I'm just worrying too much..... but I don't think stocks are cheap and I certainly don't think real estate is cheap (remember I'm in Canada). And I don't hear people saying that they never want to buy another stock again. Thus I think True Capitulation in in the future......... maybe 6 months, 1 year, 2 years, who knows. In the meantime there will be lots of opportunity but use caution...