Overbought! At its Peak! Bull getting Tired!
I just looked at my top 10 CAPS Active holdings. I do this from time to time to see if I should take some huge "winnings". With the exception of my homebuilders and USG (which is like a leveraged homebuilder), all my top 10 picks still sport a forward P/E of 10 or less.
So with all the CNBC Yammering and "Expert Analysis" Naysayers, I'm not concerned. Sure, we might see dips, but the overall direction still seems very positive.
Some have likened this bull market to the 1982-1987 Bull run. I like that. From 777 in August 1982 to 2731 in August 1987. 5 years, easy to do the math. If we take the February 2009 lows and go 5 years out (to February 2014), we would see a dow in the 22000's. Then the pullback that looks like "Black Monday" would drop us back to 14,500 before climbing higher. That sounds like a very potential scenario here. That said, I think the forward P/E's are lower now than they were in the middle of that bull run. This is a very cautious, value-driven Bull.
One other thought - in 1987, you could buy 10-year Treasuries at 7%+. Today it is around 2%. That just makes the Stock Market that much more attractive and may drive additional "panic buying" as Bondholders jump the sinking ship (could you imagine if 10-years went back to 7% this year?!?).