Since March 2009, the S&P 500 is up 148% - an excellent performance given the economic unreality occurring under the covers (for example the bounce and fade in real EBITDA for the S&P 500 which is up only 18% from the March 2009 lows [6]). However, to get a sense of just what a fiasco Ben Bernanke and his merry men (and women) have created (and mis-allocated), the performance of firms that are not 'high quality' is up 250% in the same period (massively outperforming the 'excellent' companies' gains of 180%). Based on 'quality' rankings from Barry Bannister's "In Search of Excellence," the un-excellent companies have crushed their 'excellent' peers - what could possibly go wrong?
[7]
Luckily, we are well anchored in fundamental reality...
[8]
Charts: Bloomberg