We are currently in one of the most difficult economic environments many of us will see if our lifetimes. Even though the unemployment rate has fallen from its high of 15% to a level below 10%, it still exceeds the peak from the 2008 crisis, which itself was one of the deepest recessions ever. Small businesses and entire industries, like air travel, cruise lines and hotels are struggling mightily as the various degrees of lockdowns we have experienced in recent months have taken a huge toll. But despite all of that, the stock market currently sits at all time highs. 
In this episode, we look at the reasons for this disconnect. 
We discuss: 
- Why it is not uncommon for the stock market to become disconnected from the economy
- Why the businesses we see struggling in our everyday lives aren't the most important ones to the market
- The implications of unprecedented levels of government stimulus
- Why psychology can often explain short-term market moves better than fundamentals
ABOUT THE PODCAST
Excess Returns is an investing podcast hosted by Jack Forehand (@practicalquant) and Justin Carbonneau (@jjcarbonneau), partners at Validea. Justin and Jack discuss a wide range of investing topics including factor investing, value investing, momentum investing, multi-factor investing, trend following, market valuation and more with the goal of helping those who watch and listen become better long term investors.
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