As we move into year end, the airwaves are full of analyst forecasts for further equity gains in 2018. Saved from bankruptcy by government bailouts in 2008 and emboldened by years of central bank asset buying since, the long always siren song has never been louder.
But already the second longest expansion in market history, at some point here, odds favor less favorable outcomes. As shown in this table since 1850, there has never been a decade that escaped having at least one economic recession. Bulls are betting 2008-2018 will be the first.
It is critical for thinking people to remember that the investment sales sector is always bullish. No matter how much undeserved gains they have already been gifted, this crowd will always call for more–because they are paid to keep people in risk assets at all costs. This reminder from Sven Henrich on the bulls of 2008 is useful. Same crowd today, same message always. Buy and holders beware.