11 May 2026
More buyers than sellers
Why did the market rebound so strongly in April? When the market appears to be exploding higher for no apparent reason, investors’ go-to quip is, “more buyers than sellers.” While this catch-all answer humorously brushes off the question as unanswerable, it actually is a universal truth. Philosophically, the only reason the market goes up is “more buyers than sellers.”
In the short-run there are a myriad of reasons why investors may be buying. However, when sudden selling occurs, the reason is often obvious – like a war in Iran. Day to day, month to month, this ebb and flow of investor reactions can be quite emotional, unpredictable, and downright irrational.
In the long run though, the single best predictor of future stock performance is earnings yield. Stocks follow earnings – when future earnings prospects improve – investors should be more interested in owning stocks. And, if you can buy high earnings growth at low prices, that’s the chef’s kiss.
The big story this month is investors shifting their focus from the war in Iran to the ever-improving earnings growth prospects of businesses around the world.
Read more in the May Monthly Briefing.
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