Mohamed A. El-Erian is Chief Economic Adviser at Allianz, a multinational financial services company. He recently authored an article in Business Insider about the A.D. 2014 stock markets entitled “Traditional Factors Alone Don’t Explain This Remarkalbe Year For US Stocks”.
Mr. El-Erian observed that,
“2014 has been a remarkable year for US equities–not just in terms of the handsome return for investors (15% for the S&P) but also because of how this was delivered.
“In 2014, the S&P,
“Registered 51 record highs (that’s an average of one a week, the most since 1995);
“Never had more than three days of consecutive losses (a new record);
“Consistently decoupled from potentially damaging historical correlations with other markets, most notably government bonds and commodities; and, in the process,
“Always managed to recover quickly from sudden and scary air pockets.”
You have to admit that, when viewed from Mr. El-Erian’s perspective, last year’s US equity markets were almost as surprising as flipping a coin that came up “heads” 50 times in a row. All this “good luck” makes you wonder. It makes you want to check the coin to see if it has two “heads”.
Clearly, something strange (or even a little crazy) dominated last year’s markets.