More Market Bubble Talk Bubbling Up: Time to Take Profits?

Well it seems that some heavy hitters are talking about a FED funny money bubble forming in the market.

Larry Fink, CEO of Blackrock, the world's largest money manager, warned this week that the Fed's quantitative easing policy was leading to the formation of market bubbles and advised the central bank to start tapering immediately. 

Meanwhile Robert Heller, former Governor at the Fed from 1986 to 1989, told CNBC on Thursday that markets were "perilously close" to the formation of a bubble. 

The S&P 500 and the Dow Jones have risen 24.5 percent and nearly 20 percent, respectively, year to date. 

Well a 24.5 gain should be banked for sure and cash raised for a sell off. It would be nice for a correction to pop up in the market so I can buy some stocks at a discount. I just cant see the Stock Market making new highs every few days without some kind of pullback.

The warning sign of a bubble is whenever someone says "This time it is different." and Jeff Reeves of MarketWatch just did. 

But investors need to ask themselves why we bother comparing stocks to the same valuation metrics from a century ago when so much has changed on Wall Street in regards to the way we trade and the way companies operate. 

Companies still do the same things as they did a century ago. They try to make a good product and have people buy the product. The scale of the capital they have is different (Apple has $150 billion in cash) but at the end of the day they make good products that people want. As soon as they stop making a good product they will get clobbered.

At least this time the "new economy" stocks like Google and Facebook are making money unlike the Dotbombs of 2000. The problem is if the stock price of Google and Facebook actually match up with reality. If not there will be nice correction before we can go any higher.