Imagine that you are the Chief Investment Officer of a life insurance company. Everyday people buy policies that you will have to pay off when they die, which do they with annoying regularity. But you don't know when they will die, so you need to invest the premiums. 1/n

Back in the day you could buy government bonds paying 6% and spend the rest of the day playing golf. But those days are gone and now government bonds pay more like 0.6%. That's not going to get the job done, but you must meet those future obligations. So you look around 2/n

The cool kids are buying private equity and "alternatives" but you are smart enough to see 3 problems with that stuff: 1. Liquidity. You can't tell when a pandemic will cause claims to swell, so you need something you can sell when you have to. 2. Transparency 3/n

What is that stuff I bought really worth and who says so? When times get tough, often it is worth a lot less than you were told. 3. Scale - you have to invest lots of money, all the time. There is not enough of that stuff to go around. So what does that leave? Stocks. 4/n

And of course you in the insurance biz are not alone. The manager of every defined benefit pension plan and every endowment faces exactly the same problem. Hungry mouths that demand to be fed and slim pickings from traditional safe haven investments. So you all buy stocks 5/n

And since we are talking trillions of $ world wide that's a lot of stock getting bought. But at the same time, the supply of quality stock has shrunk due to massive stock buybacks. So what is going to happen? If you took Econ 101 you know the answer, so don't act surprised 6/n

Of course stocks are going up given the huge demand and the limited supply of high quality names. And the highest quality are going up the most. Maybe too much too fast, but the direction is undeniable and no reason to think that will change as long as rates are ultra low.