Thanks Aplenty

Story Highlights:

• There's lots of negativity out there, but there's also plenty for investors to be thankful for this year.
• Bears fecklessly cite jobless numbers and other weak "indicators" as reasons why this is a bubble, not a bull.
• Such sentiment is a wall of worry for this bull market to climb.
• Expect more better-than-expected news as economic data follow stock markets upward.

As we gather around the table to feast on turkey, Tofurky, or whatever manner of bird or beast chosen—we find plenty to be thankful for. Of course, every Thanksgiving has its drama (did Aunt Betsy really need that last glass of spiked eggnog?). And this year there's more than most as bears bemoan high unemployment, a sluggish economic recovery, slow consumer spending, and a weak US dollar will swap turkey for roasted bull.

For a world contemplating global financial catastrophe a year ago, right now's a better time than most anyone expected. And call us relativists, but reality versus expectations is what matters in the market game.

We've said bull markets climb a "wall of worry." But it takes great fortitude to see through the negativity and find the positives—particularly after a bear as big as last year. Here are just a few things we're thankful for this holiday:

• Broad Stock Market Recovery: Since the March bottom, the MSCI World and S&P 500 are up 72% and 67%,* respectively. Both were falling fast this time last year, with few predicting anything but doom over the next 12 months.
• Improving Corporate Earnings: Corporate profits continue outstripping too-dour sentiment. Having trimmed down quickly in the face of recession, firms will ramp up production just as quickly when demand picks up.
• Economic Recovery: Q3 GDP grew 2.8%, the first positive quarter since Q2 2008. This time last year, many fretted a new Great Depression—but unemployment, for example, is high at 10.2% but nowhere near the 25% peak in 1933.
• Developed Nations Exiting Recession: Figures from the Organization for Economic Cooperation and Development (OECD) show an increase in combined GDP over the second quarter—the OECD also forecasts 3.4% global growth in 2010.
• Emerging Markets Leading the Recovery: China, with its rise in consumer spending and infrastructure buildouts, and other developing nations are likely to lead the world out of recession.
• American Consumers Still Kicking: Consumer spending and income rose last month, indicating consumers aren't dead, as commonly thought. Should spending slacken, it won't derail recovery.
• Economic Guidance Revised Higher: The Fed raised growth forecasts for the next year, citing credit availability and consumer spending, among others, as contributing to GDP.
• Free Trade Mostly Unfettered: Despite some tariff spats, free trade has prevailed throughout this recession—allowing goods and capital to flow freely to where they can most efficiently be produced and utilized.
• Improved Housing Market: Housing may not have been the primary cause of the bear market and recession, but its recovery demonstrates uncertainty is waning and government stimulus is kicking in—new home sales climbed in October as buyers rush to purchase a home before a first-time homebuyer's tax credit expires in June 2010.

It's not the best of all possible worlds out there today. But continued better-than-expected news is probable as the recovery picks up pace—don't wait for it. History shows markets find good tidings well before they make headlines—yet investors often shoot the messenger, shunning stocks until the big part of the bull has come and gone. Instead, we advise sitting back, loosening that belt another notch, and enjoying football and family. It's up to you to keep the nog away from Aunt Betsy.

Happy Thanksgiving!

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*Bloomberg