Fiyon!

"Too infinity and beyond." - Buzz Lightyear a character in the Disney movie Toy Story

When my son was only 3 he loved the movie Toy Story.  One of the lead characters was a space ranger named Buzz Lightyear.  My son loved him and used to stand on the edge of the couch, hold out his arms like wings and as he would jump off the couch to fly like Buzz he would say the word Fiyon!  This was his way of saying "Too infinity and beyond".  Needless to say he never flew and neither did Buzz in fact when Buzz tried to prove he could fly he was fortunate in that he bounced on a ball and then hooked on the ceiling fan giving the impression of flying.  His friend Woodie, exasperated says, "That wasn't flying, that was falling with style!"

Recently I watched a show about the concept of infinity.  It was fascinating in that most of us while we understand that infinity is forever have no real concept of the actual term.  Think about it for a second.  Infinity - forever, hard to imagine.  How can something go on forever?  The idea is that the universe is forever but that is hard to believe, how can it go on forever?  But the problem is, if it is finite then what is outside of the universe?  Going even deeper, if you grasp the concept of infinity then there must be an infinite amount of infinities and therefore there must be an infinite amount of worlds and people and an infinite amount of you scattered around the universe.  Pretty crazy stuff but the reality is that once you believe in infinity then anything that can happen is happening somewhere in the universe.

So bringing this concept back to the markets opens a plethora of possibilities.  For this reason there is no reason to believe that the market can be supported by the Federal Reserve forever (as it appears some people believe).  On the flip of that there is no reason to believe that the market will die tomorrow.  Low interest rates could be with us for a far longer time than anyone could even imagine, driving stocks higher than anyone dares predict.

Now one thing that you can guarantee is that the market will crash.  It has on numerous occasions and it will again.  The question that traders try to predict is when?  With the markets at precarious levels and the indexes being driven higher by the speculative stocks and momentum rather than value it appears that this could happen at any minute but that is just it, it could also keep churning higher for a few more years.  It appears that the Federal Reserve will be lead by Janet Yellen next year and that means more printing not less.  So with continued stimulus the market could continue unabated for the foreseeable future.  The question is do you want to place a bet on this or not and my answer, as I detail in my book How to Thrive in the Obama Economy, is that this is not the time to try to fly as unlike Buzz you may not fall with style and that risk far outweighs the potential rewards.  Find other avenues for your investments and stay out of the madness that is the stock market.