To be aggressively optimistic on this stock market now is to bet that it can challenge the greatest bull market of all-time — the 13-year run that ended in early 2000 .
In terms of its cumulative gains, persistence, valuation and the public’s exposure to stocks, only the final years of the 1990s advance sit at higher elevations.
This might sound scary, given how singular that bubbly period now seems — and given the brutal wealth destruction that followed. And it should be sobering, in terms of what it means for longer-term expected equity returns.
But here’s the good news, for now. First, this market is hinting that it’s accelerating in that direction. There’s also a good deal of room overhead in terms of price gains between where we are and the late-’90s extremes. And, finally, in the areas where today’s backdrop differs from the 1987-2000 version, the current one looks better in terms of corporate fundamentals and capital-markets behavior.
