I do like froth in my capuccino, but not in my market investment. But thats the inherent nature of the market, to toggle between overvalued and undervalued conditions.

The will of the free market reigned in yet again. This time too like always, the message of the free market was, as John Mauldin puts it, to prove that most people are wrong. So my prediction of some market correction in April due to shortfall of 1Q earnings was infact a popular assessment of the public. And the market disapproved the popular sentiment by rewarding the investors with whopping returns in April.

Where did I/we go wrong? One of the main reasons was the low earnings expectation for 1Q, but the 1Q earnings for SP500 companies came in above 7%. While the widespread anticipation of low numbers was defied, the stock market roared setting all time highs for Dow and just little short of a record for SP500.

I am glad that I was wrong. I would like to see stronger earnings for our companies. However, I do see that current condition of stock markets are exciting for ordinary public and the new records set in the market are done with "lesser" force than before.

This might have created some froth in the market. Be prudent in moving new money into the current market. If are already invested, enjoy the ride and move your stop losses appropriately. Nobody knows what is going to trigger the next correction, but when it does, sieze the opportunity. Because I am in long term bull camp now!

Nidhi