Clients may take it for granted that I am bullish during a bull market.  I mean, what else would I be?  I sometimes quote my (famous) investor acquaintance, Ed Seykota, by saying:  “It is not logical to be bearish in a bull market.”

Well, most investors are still illogically bearish, and this includes professionals and major institutions and even the paid analysts that so many investors depend on.

When one “shorts” the market, they are betting, with their hard-earned money, that the market is going to fall sharply.  Right now, we have the biggest hedge fund ETF short position in the history of the universe.  This makes me very bullish because most people are always wrong… when sentiment is too bearish, it is a very bullish signal.

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And we currently have the most money, in the history of the universe, still sitting on the sidelines, waiting & wanting to move into the markets but too afraid to make the move, although it will.  This makes me long term bullish since much of the $7,250,000,000,000 will slowly enter the market over the next few years.

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Currently, most investors are still selling into any rallies (see the red area at the far-right bottom).  This makes me very bullish.

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But when the stock market drops 18% and then (“V” shaped) recovers as quickly as it just did, then the market tends to just keep moving higher (see the green vertical lines as compared to the S&P-500 over the past 55 years).  This makes me very bullish longer term.

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Currently, there are 34% more home sellers in the United States than there are home buyers.  This will lower home prices, which will lower inflation (because 55% of inflation is being caused by high home prices), which will allow the Federal Reserve to finally be able to lower interest rates, which will be extremely stimulative for the entire stock market, including the very undervalued small-cap stocks.  Lower yields would also offer lower rates on new home mortgages, so that stimulation would put somewhat of a floor under home price losses with, perhaps, strengthening home prices showing up again sometime in 2026.

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SUMMARY:  I’m watching provisions in Trump’s “Big Beautiful Bill” and how it affects U.S. investments by U.S. citizens and by overseas investors; I’ve probably read more about the bill than have most members of Congress.  There is certain to be a battle getting approval for the bill because Trump’s program would increase the U.S. deficit by a whopping $5.8-Trillion (which defeats any legitimate purpose of DOGE… which is now to continue under the leadership of Peter Thiel).

The economy (and housing) is starting to weaken.  Stocks lead the economy… stocks were weak, but they are steadily getting stronger.  And now it is the lagging economy’s turn to weaken as stocks now get stronger.  It is likely that six months from now, in the late Fall, both stocks and the economy will be strong at the same time and remain strong for an extended period.

So, I remain bullish.  I am still bullish on U.S. stocks but have also added Developed Market stocks to our mix (such as Euro area, Northern Europe, UK and Japan).  The USDollar, despite its recent weakness, is still within the walls of its bullish trend channel, but I still also hold gold bullion which is “anti-dollar.”  Artificial intelligence and innovative-disruption stocks will lead the way higher over the next few years.  Big banks will gradually be funding new (IPO) Initial Public Offerings of innovative new baby companies, and both will profit.  Growth stocks will continue to beat value stocks over the next few years, until they fall out of grace in the 2030’s.  Of course, we will continue to get zig-zagging (often Trump caused) volatility and occasional downdrafts.

And we will eventually get the big bear market that is always promised at the end of ALL secular bull market cycles (as in the technology based Dot.com bust in 2000), and that will offer additional profits because it will finally be the correct time to “short” the market.  Again, a “short” is a bet that markets will drop.  But at that “end-times” event, we will be the rare short holder and most of the market participants will be euphorically bullish and buying on every dip, as the market drops (and drops and drops) over a, perhaps, two year period.  But that is not now and it is not soon.

Although everyone else is highly negative, I’m so (patiently) bullish that I’m almost giddy!

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Thanks for reading!

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