Seven Reasons to Be Bullish Now

I got into a fistfight in a bar the other day. There was blood everywhere. I got glass splinters in my face. The other guy might still be in a coma. I'm still wearing the white bracelet they put on me when they checked me in for "observation."

This is how I feel every day when I battle the bears who participate with me on an email list made up of investors and traders. The wall of worry is huge and seemingly insurmountable. But here are a few bricks for the wall of hope.

1. Private equity. There's roughly a trillion dollars sloshing around in the private-equity world, including the money that banks would lend to close any major purchases. With BlackstoneBX buying HiltonHLT at 16 times cash flows and the average purchase now coming in around 11 to 13 times cash flows, it opens up an entire universe of stocks that can be takeover targets. Possible candidates include Macy'sM and WyndhamWYN.

2. Retail investing. The retail investor still has not gotten back into the game. The cover story in the latest edition of Barron's highlights that fact and offers various statistics that retail investors are showing nowhere near the level of interest they exhibited at the top of the bull market in 1999 to 2000. Until that happens, I don't think we're anywhere near a blowoff top. As the retail investor comes back, interesting ways to play that include E*TradeETFC and Charles SchwabSCHW. E*Trade in particular has a price-to-earnings ratio right now of 14.9 and a forward P/E of 11; any additional investor interest likely will send that forward P/E down into the single digits, making it even a potential buyout candidate by a larger bank.

3. Buybacks. It's in the news every day so you would think this is just completely baked into the market, but it isn't. There are currently about $600 billion in buybacks under way right now. CignaCI, IBMIBM and EMCEMC are all companies that could benefit. Check out the "Mad Money" Buybacks portfolio on Stockpickr to see companies that are purchasing their shares and actually reducing shares outstanding.