You've heard blokes like me talk about fundamentals, and how they stack up: "The fundamentals look compelling", "The fundamentals are deteriorating", etc. Last week I explained why stock market bulls are bullish on the economy. This week I'll snapshot why bulls are bullish on things such as corporate earnings, assets, liabilities, profit margins and the like.
My observation is that not nearly everyone is feeling good about the stock market's present state of affairs. If you're in the naysayer's camp, the following charts may surprise you. But, please, take heed; there's no guaranteed---never!---that bear markets can't emerge amid decent fundamentals. I remain sanely agnostic when it comes to the short-term direction of the market.
While the following indeed bolsters the bull's case, make no mistake, bears have their charts as well. Although these days they have to get a bit more creative than they did a few years ago. Were I to take the bear track (remember, I---in the short-run---take neither), I'd simply present these very same charts and remind you that what goes up, or down, as the case may be (you'll see in a second), must go down, or up, as the case may be.
Here's a 30-year look at the cash on the balance sheets of the companies comprising the S&P 500 Index (click on each chart to enlarge):
Current (short-term) assets and liabilities:
Debt to Asset Ratio:
Price to Earnings Ratio:
Price to Book Value Ratio: