Submitted by Dan, Jul 8, 2007 11:32

One of Wall Street's aphorisms which is generally correct is that "a bull market climbs a wall of worry." In every rising market, from the end of WWII onwards, one can always cite myriad reasons why the market is overpriced, equity values are a house of cards, yada yada yada.

Interest rates are higher than a year ago, to be sure, but compared with analogous stages in previous cycles, they are actually on the low side; compare today's rates with those of 1996, for example, a time when the previous bull market was just getting started.

I remember one of Dorfman's columns from exactly one year ago when he quoted hedge fund legend Michael Steinhardt as saying that he (Steinhardt) saw nothing good on Wall Street's horizon. At the time the Dow was 10,600 or so and heading south, while oil prices were $78 and heading north. Had one shorted the market then, and held onto his short positions for the subsequent 12 months, one would be in the poorhouse today, as the market, as measured by all the major indexes, has risen over 25% off that interim bottom.

Another Wall Street aphorism which bears repeating is "The stock market has predicted 22 of the last nine recessions."

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