BOOM TIMES

WE ARE IN BOOM TIMES! It is difficult to fully describe a rotation. Yes, there are interest sensitive sectors such as housing that are getting pounded. The reason is that business demand is going out the roof. The world economy is growing at the fastest average rate in the history of the world. Do I need to say that again? The world economy is growing at the fastest average rate in the history of the world.

Companies are spending money because there are huge profits to be made by investing in productivity enhancers. Productivity is roaring ahead at 4% in the US, at 17% in China!

Do you remember Say's Law? "Supply creates its own demand." A good example is that the price of electricity has seen an incredible real decline for more than 100 years and the supply has been more and more abundant; the demand has risen to meet the supply. A reader wrote last week expressing concern about too many cheap goods coming from China. I should have mentioned Say's Law in my response. The more cheap goods we buy from China, the more demand China has for computer software, education, jet aircraft and other very high margin goods. The reason profit margins are at record highs in the US is because "huge supply is creating huge demand".

Yes, the public is pulling money out of stock funds ....(to receive complete stock opinion)