What's up with the market?

Today a friend asked me why the market's been up lately. To him it doesn't make sense. He works with businesses and sees firsthand the numbing effect of tightened regulations and uncertainty over what's to come (in terms of yet more regulating as well as taxation). Suffice it to say, while he's not an outright bear, he's justifiably not the most bullish bloke I know.

I answered, words to the effect: We can speculate as to what motivates buyers and sellers at any given moment, but of course we'll never know for sure. I can say, however, that, historically speaking, your conventional valuation metrics (price to earnings ratios and such) suggest that stock prices remain pretty compelling. And when you consider what they have to compete with---zero real interest rates---it makes sense that stocks would be trending higher. And while too many governments haven't managed their financial affairs in a manner anyone with a financial affair would deem responsible, companies, by and large, have.

So does that mean we're off to the races? Like I said, we can speculate, but of course we can't know for sure. What we can bet invest on, however, is that, governments notwithstanding, there remain long-term opportunities (globally) for the patient, volatility-tolerant, investor to exploit.