Dear Reader,
This is Dylan Jovine with Behind the Markets.
Happy Tuesday. Today is Tuesday, May 12th.
I spent the weekend laid up at home, sick, coughing up a lung.
And while I was lying there feeling sorry for myself, I started thinking about a question I get asked constantly.
When does the bull market end?
The Simple Answer
The bull market ends when the Mag 7 stops spending a trillion dollars a year.
That's it.
AI is exerting a stronger upward gravitational pull on this market than the fear of spiking oil from the Iran conflict is pulling it down.
AI is winning that tug of war — clearly.
And the Mag 7 is spending over a trillion dollars this year alone — on semiconductors, data centers, software, AI infrastructure, all of it.
Based on what I've been reading in their earnings calls and build-out plans, they have another year to two years of massive construction ahead of them.
That means the fuel for this bull market is still very much burning.
What Could Stop It
Two things.
First: the Mag 7 fundamentally stops spending.
Second: the Fed starts raising interest rates again.
On the Fed — there is no rational Fed chairman on the planet who would lower rates right now with inflation still elevated and the economy picking up.
The new Fed chairman, Warsh, is almost certainly going to sit on his hands until after the midterms.
Fed chairmen don't typically make big policy moves in the middle of a political season.
So realistically, we're looking at five to six months of relatively clear skies before any of that becomes a serious concern.
Of course, geopolitics — whatever happens in Iran — can change that picture at any time.
But right now, the bull market has a runway.
What I Learned in the Dot-Com Era
Here's the other thing I wanted to share, because I see a lot of members asking about whether they should sell what they own and chase the next thing.
When I was in my twenties, I was always looking for action.
I'd see a stock moving, buy it, flip out of it, buy the next one.
I was churning my account over and over.
I felt like I was doing something.
I wasn't.
What I learned looking back at all that activity is that the real money in a bull market is made in the waiting.
Not the trading.
The waiting.
You have your core positions — the ones you understand, the ones you got into at a good price, the ones you believe in.
And then you just hold them.
That's how big money gets made in a bull market.
And if you’re looking for a strong core holding that will pay you massive dividends over time, make sure to check out “My #1 Retirement Stock.”
In this special report, I’ll tell you everything you need to know about the little-known stock absolutely critical to the success of the AI buildout.
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Check it out here.
If you're thinking about dumping your wife of 50 years for the new piece of action that just walked by — believe me, that doesn't look good over time.
It might feel exciting in the short term.
It's not the smart long-term play.
We all know this.
The great thing about getting older is you actually start to act on it.
Anyway, I am sick and half-delusional.
Just kidding.
I will speak to you tomorrow.
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