The Valeant saga is probably a long way from a resolution. Anyone that says they know how it will end is either delusional or looking to influence the stock. That being said, there are a few lessons to be gleaned:
There’s been no shortage of criticism of “Helicopter” Ben Bernanke’s aggressive quantitative easing policies. But you have to hand it to the man. He’s nothing if not determined. Against all odds and even the laws of financial physics, he’s accomplished his primary goal—juicing stock prices.
The problem is, as usual, most average investors are behind the curve.
Year-to-date, as the NY Times pointed out Sunday, more than $85 billion has been put into bond mutual funds compared to only $73 billion for stock funds. But buying bonds is not a wise strategy going forward. Thanks to Uncle Ben’s interventions and other factors, stocks are almost surely going to outperform bonds for the next three, five, maybe even ten years.