The Present’s So Bright I Gotta Wear Shades


Is this as good as it gets for stocks?

That’s what the Financial Times’ estimable markets columnist John Authers asked Friday, and he cites some key data on why this may be the best of all possible worlds:

  • The Sharpe ratio, a widely followed measure of risk-adjusted return, has been 4.5 over the last 12 months, better than all but 99.7% of the time since 1900.
  • Cash balances in mutual funds and money-market fund assets as a percentage of equity funds are at all-time lows, suggesting there’s little cash on the sidelines.
  • The misery index (unemployment rate plus inflation) is at an all-time low.
  • In the nearly 12 months since the election, the Dow Jones Industrial Average has soared 31%, the Standard & Poor’s 500 index has rallied 23%, and the Nasdaq Composite index has skyrocketed 32%, powered by many of the FAANG stocks.

So, why am I skeptical?

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