Fundamentally we are in a bull market: Overall, I think, we are in a bull market. Fundamentally, the US economy is not anywhere close to a bubble. It is slowly getting better, average incomes are increasing, and corporate balance sheets are the strongest they've ever been historically.

Household debt service ratio (HSR) is at 10.61 (lowest 10.51 in Q383 and highest 14.08 in Q307) while the household financial obligation ratio (FOR) is at 13.9 (lowest 13.3 in Q480 and highest 17.66 in Q307). These ratios indicate debt levels of households and their ability to service the same. We are close to the lowest levels seen in early 1980s which was the beginning of the great bull market. Historical low levels, as seen currently, depicts that households have significantly delevered and have the ability to take on additional debt that can further fuel the economy. Besides, as

In two months, Apple's stock (AAPL) price has fallen by almost 21%. The company is currently trading at a P/E of 11.9x and at a future P/E (FY13) of 9.8x. With a 5-year growth rate of 15%, a 2% terminal growth rate and a 12% discount rate, the stock currently trades at a margin of safety of 23%. The average target on the street is $760, which is 36% higher than the current price. Not to forget, the company has USD 121bn in cash, equivalents and marketable securities ($128 per share) and has not splurged on erroneous acquisitions, which gives it a lot of room for inorganic growth.

A lot of hedge funds are sitting on significant profits on Apple. Since there is a probability of an increase in the capital gains tax next year, unwinding the most profitable trades just before 2013 makes sense. This selling pressure

The U.S. economy's health could serve as a leading indicator, and an understanding of it could help in hedging your portfolio. 70% of the U.S. economy is consumer spending. As long as we can understand the consumer, their spending patterns, and the likelihood of a cutback or a potential shock, we can get some idea of potential economical problems. The model is simple, very logical but still powerful. It tracks the health of the economy by analyzing three factors:

1. Monthly savings rate of the U.S. population (the higher the savings rate, the better the cushion; the lower the savings rate, the more people are susceptible to a default).
2. Growth in interest payments of the U.S. population (significant increases in monthly interest payments would mean the consumer is vulnerable to a default).
3. Growth in personal income of the U.S. population (significant increases in the personal income of the people are not