China MediaExpress Holdings, Inc. (fka CCME)

[Must Be Patient]

Well my perspective is that it comes down to fear vs. greed. Fear is the more intense emotion, but greed is incredibly powerful too. Over time, investors *will* bid up undervalued assets if they really are undervalued. The post you made sounds like many posts I saw in spring 2009 along the lines of "yes stocks are cheap, but it doesn't matter because people won't buy them". I can tell you that many very smart people were thinking that way in 2009 and it turned out to be way wrong.

What exactly caused the bullish sentiment to come back? At bottoms, when stocks start getting bid up, people that are either positioned bearishly or on the fence have to buy back in to get the returns they are looking for.* That's a long-winded way of saying that higher prices will beget higher prices.

*As an example, in spring 2009 people had the choice of cash earning 0%, bonds earning 2%, or stable stocks with earnings yields of 15%+. FWIW even today, stocks like CSCO and INTC are selling at a EV/FCF of 10 while cash still earns 0%.