“Higher markets in the face of eroding fundamentals can be a toxic combination.” 
-Super-investor, SETH KLARMAN

Who knew? No one has ever accused me of being politically correct.  However, I do try to avoid being politically offensive; therefore, in this week’s EVA, I’m going to carefully venture into potentially dangerous terrain. 

“We all know it’s going to end badly, but in the meantime we can make some money.”
-JIM CRAMER

POINTS TO PONDER

1.  The contrast among a soaring stock market, rising interest rates, and flaccid corporate profits has become more vivid.   Excluding financials, S&P 500 earnings are on track to actually decline in the second quarter versus a year ago.

“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs.”
-WARREN BUFFETT

Why is it that bull markets take on a life of their own, often rising much more than fundamentals dictate?   While there are multiple answers to that multi-trillion-dollar question,

“A masterly retreat is itself a victory.”
-NORMAN VINCENT PEALE

POINTS TO PONDER

1.  Evergreen GaveKal had a cautious view of most investment sectors over the last year.  Although this stance has been off the mark with regard to the US stock market, at least thus far, it has been correct in terms of most other global asset classes. 

“Fed policy has had a distorting effect on capital allocations decisions of all kinds at virtually every level of the economy.  It is a very large and dull hammer for markets.”
-RICK REIDER, Manager of $760 billion in fixed income assets at BlackRock.

Too much cheesecake? EVA  readers might find this surprising,