Bullish Investors Continue to Fight The Fed

Bullish investors continue to “Fight the Fed,” hoping that a change to monetary policy will reignite the 12-year-long bull market. But, for over a decade, the “Don’t Fight The Fed” mantra was the “call to arms” for bullish investors.

“With zero interest rate policies and the most aggressive monetary campaign in history, investors elevated the financial markets to heights rarely seen in human history. Yet, despite record valuations, pandemics, warnings, and inflationary pressures, the “animal spirits” fostered by an undeniable “faith in the Federal Reserve.”

Of course, the rise in “animal spirits” is simply the reflection of the rising delusion of investors who frantically cling to data points that somehow support the notion ‘this time is different.’”

Not surprisingly, as a massive flood of monetary interventions detached market dynamics from economic and fundamental realities, bullish investors scrambled to find rationalizations for ever-higher asset prices. David Einhorn previously explained such:

“The bulls explain that traditional valuation metrics no longer apply to certain stocks. The longs are confident that everyone else who holds these stocks understands the dynamic and won’t sell either. With holders reluctant to sell, the stocks can only go up – seemingly to infinity and beyond. We have seen this before.

Of course, with more than $43 Trillion in bailouts and Federal Reserve interventions, it is of no surprise that bullish investors cast caution to the wind.

Bullish Investors, Bullish Investors Continue To Fight The Fed

It is also not surprising that stocks have come under pressure as the Fed started hiking interest rates aggressively and the process of reducing its previous influx of monetary support.