UBS: Bull markets die from excesses - not old age: The fundamental growth in the current five-year old bull market can be attributed largely to an impressive...

UBS: Bull markets die from excesses - not old age: The fundamental growth in the current five-year old bull market can be attributed largely to an impressive rebound in corporate profits. In the long run, while market valuations tend to oscillate within a wide range around their long term average, ultimately it is earnings that anchor the market's fundamental value. From this perspective, the market advance over the past five years has not been excessive, and has in fact closely mirrored the gains in corporate earnings. Using quarter-end data, the S&P 500 has increased by 135% since the end of the first quarter in 2009. Similarly, trailing 12-month S&P 500 operating EPS have increased by 120%. In our view, the five-year bull market has not been driven by QE supposedly forcing investors into riskier assets, but rather by improving market fundamentals - ie., strong corporate growth