Kevin Duffy on left- and right-wing delusions

The latest bull run was kicked off by the release of ChatGPT just over two years ago.  From trough to all-time high, the S&P 500 vaulted from 3,840 to 6,090, good for a gain of 59%.  The previous high was set on January 3, 2021, with the S&P perched at 4,797.  I believe we are seeing all of the classic signs of another significant peak in U.S. stocks. 

The symmetry of this second major market top is hard to miss.  The broad market actually crested in early 2021, coinciding with the Biden victory and inauguration.  Speculative excesses were quite obvious in meme stocks and Cathie Wood’s “growth at any price” moonshots.  Left wing delusions included Covid vaccine rollouts, DEI, ESG and male athletes competing with women.  Today’s speculative excesses include bitcoin, generative AI and Big Tech.  Right wing delusions include trade wars, hot wars, deportations and American exceptionalism. 

The Trump victory was the cherry on the speculative sundae, the catalyst for a euphoric blowoff rally.

~ Kevin Duffy, "Portfolio Review," p. 17, The Coffee Can Portfolio, December 20, 2024