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There's a standard answer you hear a lot these days when talking heads and market pundits are asked how they see the current market. It's a phrase I've heard so often it's become cliché.
Cautiously bullish.
It's the ultimate hedge, which I think basically means you like the current uptrend, but that it could turn around any time. Okay, so how it that useful? Are you supposed to cautiously invest?
Frankly, I have no idea.
In truth, the fact that I hear those words so often is one reason I am steadfastly bullish on stocks.
No caution here.
Why? Well, caution means skepticism. It means you're not totally bought in.
Ever hear the phrase, "Markets climb a wall of worry"? Well, caution is worry. Caution means holding cash on the sidelines. And as long as I hear "cautious," this current bull rally has room to run.
When I hear "optimistic" and "all in" and actually see money flows supporting that sentiment, that's when I'll be worried. That's when I'll cash in my calls and start buying puts.
But for now, I'm bullish. Here's why.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.