UK economist Jonathan Tepper, who in February 2016 predicted an Australian property crash, where property values will plummet 30-50%, tweeted on the weekend that we’re now in the euphoric phase of the bull market. This implies that we might need to hold our breath ahead of an eventual market crash!
But this raises a few questions where there are no clear answers. So, let’s list them:
- How long does the euphoric phase last?
- As our market lags Wall Street, should we take our crash indicator from the Yanks?
- Are European markets in the euphoric phase?
- Could a Trump tax plan getting passed by Congress stretch out the length of the euphoric phase?
- Do the historically low interest rates worldwide give credibility to the claim that this stretches out this bull market and could easily lengthen the euphoric phase?
You might recall that I have often quoted the famous advice from the legendary investor, Sir John Templeton, which goes like this: “Bull markets are born on pessimism, grown on skepticism, mature on optimism, and die on euphoria.”