Yes it comes down to a timing difference, we can argue that the market is more forward looking with an in-built discounting mechanism but at the same time that is in the mix with a surge in retail exuberance (brought about by a sudden money drop and feeling of isolation) as well as central bank intervention , but we cannot be so sure that the market is fully immune to worsening economic and earnings revelation as it ultimately comes down to when confidence erosion begins to set in [ possibly when market participants start realising that everything they had assumed about a V recovery and availability of vaccine by early next year and the re-opening is the end of the worst of the pandemic do not pan out as expected].
What happens to a market led dominantly by new market participants using money they cannot afford to lose? A run for the exits (call it a stampede) when the markets start turning down aggressively, because they know they cannot afford to lose it and memory returns about that March 23 low (what if ?). Which is why I have been cautioning all to be measured, enjoy the rally but do not lose sight of Where We're At .
