This period has been very special because of the 401k, which is itself part of the growth story of the corporate legal structure. I think this is coming to an end. Corporate boards and officers no longer represent the best long-term interests of the companies and shareholders they represent. It’s also a very precarious legal status as an arbitrary judicial ruling can make or break a company. Finally, and perhaps most importantly, the corporate bubble is based on arbitrary tax codes that both advantage corporations and push worker savings into the stock market.

Even if these conditions continue unabated, the cash flows from working class into the stock market will eventually hit equilibrium with capital extraction from the owner class. If the extractions return to the same markets, then things stay in equilibrium. They won’t, however, because the tax advantaged assets are different for them. They may seek hyper-volatility, or government bond shelters, but will generally avoid the assets on the working class tax treadmill.

There are fundamentals to financial assets that have nothing to do with “number go up”, and these will ultimately dictate reality, with the caveat that “the markets will remain irrational longer than you will remain solvent”. Rationals get wrecked too, except every once in a while when one gets lucky on their timing and makes so much money that they become a hero and we make movies about them. We cheer because it gives us hope that our intuition will serve us too. Unlikely.

This is all to say that such charts are using an inductive hypothesis to predict an inherently anti-inductive phenomenon. People tithe and sacrifice to their church for a promise of rewards in the afterlife. The stonk religion is the same; well worth the price for your peace of mind. True or not, you’d be a mess without it.