The stock market boom will continue this year as many people “finally start to realize that we are in a bull market,” investment manager Richard Bernstein said on Thursday.

Speaking at a luncheon meeting in Manhattan, Bernstein, founder of Richard Bernstein Advisors, expressed optimism about the markets for this year. As far back as 2011, Bernstein was one of the few to predict that the current bull market could be powerful and might even rival or exceed the 1982-2000 market.

“We are still very bullish on the global equity markets in 2018 based on our previously stated considerations of improving global profits, significant liquidity and investors general hesitancy to embrace equities,” the advisory firm recently wrote in a report.

Bernstein, at the meeting, said the market fundamentals are still good. “For the time being I would say that we are on the high side of fair value,” he said.

But he noted that many investors have been standing on the sidelines over the past eight years or have overinvested in bonds. That has resulted in “painful missed opportunities,” Bernstein said. Now many of those investors seem ready to buy equities.

The equity party will continue in 2018, said Bernstein, who noted that the bull market is about to approach its ninth anniversary. 

When should one put away the booze and stop drinking double portions of equities?

Bernstein says his firm looks for three factors to indicate when a bull market is going to end and a bear market will start. Profit cycles, not economic cycles, are the key to the stock market, he said.

“Wwhat we are finding is that profits around the world are generally accelerating. Growth rates are getting better. It is very difficult to say that, when profit rates are increasing, you’re going to get a bear market,” Bernstein said.

Another factor that would lead investors to turn bearish would be a lack of liquidity. “And today there is a ton of liquidity,” Bernstein said.

The third factor is investor sentiment. People became spooked and wouldn’t invest for several years after the 2008 market crash. However, Bernstein said that the data now show that people have become accepting of equities. "And that has been a big change,” he said.

Bernstein said he is bullish on the technology sector. But he is also “skeptical” that the big recent GOP tax cut will have a dramatic affect on the American economy.

“Cutting corporate taxes is like giving a shot of adrenaline to a healthy patient. The U.S. corporate sector is very healthy and cutting taxes will likely make the sector even healthier,” he said.

But he added that increased spending will likely result in more sales abroad. For instance, Bernstein said that corporations and individuals with more money in their pockets might not provide a long-term boost to the economy.

“For example, a company might consider purchasing new computers if capital equipment can be immediately depreciated/expensed, but those computers are most likely manufactured in Taiwan, Korea or China rather than the United States,” Bernstein said. “So some portion of the tax cuts’ stimulus will inevitably leak abroad.”

Ricard Bernstein Advisors analyzes macro trends and has some $6.5 billion under management.