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Bull or bear? The dangers of the stock market gamble


Ambrose Evans-Pritchard:  Risks are growing but this bull run is far from over
Great equity booms typically continue for a year or 18 months longer than a nervous rationalist believes possible.
It is expensive to pull the trigger too soon, and even more expensive to short stocks just because they look overpriced. That way lie margin calls. A strong nerve is required to stay the course amid the crowd pathologies of a late bubble.
When the end comes, it is because the US Federal Reserve has hit the brakes, or at least it has been for almost every cycle over the last century. The Fed raised interest rates by 400 basis points before the Lehman crisis, 350 points before the dotcom bust in 2000, 1,300 points during Paul Volcker’s war on inflation, and 800 points to rein in (belatedly) the “guns and butter” stimulus of the 1960s. ....

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