Bull market: even zombie companies are turning a profit

Bull market: the rally that turns junk into gold

With indices at all-time highs, any investment seems to work. A recent experiment proves it: a portfolio made up of seven tech companies written off as dead —Fujifilm, Kodak, Nokia, eBay, BlackBerry, GameStop and AMC— has returned 35.63% over the last twelve months. Concrete figures: Nokia rose 120%, BlackBerry 112%, eBay 44.9%. Only GameStop and AMC fell, but not enough to drag down the whole.

The late investor's trap

The data suggests that in a bull market anyone wins — anyone who invests, that is. However, finer analysis points to the trap: those who stay out because they consider prices too high end up entering when the market is already inflated and ready for a correction. The risk is not being out, but entering late at the peak. Most of those who try to anticipate a drop end up watching the market keep rising for years.

Cantillon effect: insiders play with an advantage

The debate intersects with the well-known Cantillon effect: new liquidity injected by central banks reaches banks and large funds first, which buy assets before prices rise. By the time retail investors get access, they already pay a premium. To benefit without being part of the financial elite, you need cheap debt before the ECB makes it expensive and a steady cash flow to buy during corrections. In other words, it takes capital and timing — two luxuries the small investor rarely has.

With markets fueled by relentless money printing, the question that remains is how long this party will last. Those who arrived early are rubbing their hands. Those who arrive late had better watch out.