As a dividend growth investor, I do not mind this behavior. There are still companies that are undervalued even in this crazy market. These companies do not participate in this crazy rally which is driven by tech stocks only. The rest of the market is churning its way up (or down). For example AT&T (T). In my opinion, this stock is undervalued and offering a nice potential return of 60.7% (23.80% annualized) with a growth of 43%. The rest is dividends.
Will it happen? I hope so. But it may not. In this case, I use the position monetization to make money selling options around the position and lower my cost basis. If I lower my cost basis low enough, any fluctuations of the stock do not matter anymore. And at some point in the future, most of the stocks reach a level where the gains are irreversible.
And this market is on it again. Rallying hard killing all bears on the way. But this rally is once again a parabola in making. The 10% correction we saw a few weeks ago was nice and healthy. The recovery from it is horrible and stinky.
What can we expect?
1) We are creating a cup and handle and we may see a pullback before we continue higher.
2) This is a crazy, parabolic move, and we will create a double top and crash again. However, double tops are rare events unlike the popular belief in them.
3) The craziness will continue, the market smashes through the previous highs and keep going higher.
I do not want to predict any of the outcomes. I have no clue what this market is going to do next. My feeling is that we will pullback again. But how much and how deep? I do not know.
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