Alan Greenspan called it Irrational Exuberance. Others have called it heady or intentional blindness. But however you look at the stock market’s performance since Donald Trump was elected, it is clear that reason is not operating and that exuberance in winning.
It is going to come to an end, and pretty soon regardless of whether you are enthusiastic or not about the Trump presidency. That is what is so distressing now – people have put aside rational thinking and have climbed aboard a train that will go over the edge, and soon.
When it all does come to an end, reason will return and folks will be kicking themselves for being suckered into a moment of exuberance.
It always happens that way. But, never has the rise been quite so dramatic and the fall so likely to be equally steep.
Scratch any investor and they will agree that the precipice is there and that a major drop soon is very likely.
But scratch them again, and they will tell you it is just too good now and they just can’t stop.
So, it will be the few (and it always is) who will step out now and reap the benefits tomorrow, a week from tomorrow, a couple of weeks from tomorrow.
Timing is not perfect, but reason is rational. It is going to end badly and we all know it.