Dow 13,333

Amazingly enough, the market just keeps hitting new highs.

Despite headwinds from a slowing economy, higher gas prices, and a rocky housing market, most companies beat analysts estimates for the quarter.

The world economy is thriving with good (for them) growth rates in Europe and very high growth in China and India.

U.S. companies benefited this quarter, too, partially because they sell many goods and services to other countries and partially because the declining dollar provided an additional tailwind to results.

Another benefit, which the analysts seemed to have missed, came from companies buying back their own stock. If a company's earnings increase by 5% and it buys back 5% of its stock, it suddenly has 10.5% growth in earnings per share. No real magic there.

I'm not foolish enough to try to forecast the short term direction of the market, but I do have some questions about how these dynamics will affect markets in the future.

If the Chinese economy slows, as the government there is trying to make happen, how will that impact the world economy? How much further can the dollar decline before it leads to increases in U.S. interest rates? How could U.S. companies be impacted by a slower world economy and higher U.S. interest rates? How much longer can companies buy back their shares instead of investing in new projects, capital expenditures or wages and salaries?

I don't claim to know the answer to any of these questions, nor do I believe that answers to these questions are necessary to successfully invest over the long term. But, I do think it is important to assess the substance behind the recent good news and ask myself whether such tailwinds are likely to continue going forward.

Nothing in this blog should be considered investment, financial, tax, or legal advice. The opinions, estimates and projections contained herein are subject to change without notice. Information throughout this blog has been obtained from sources believed to be accurate and reliable, but such accuracy cannot be guaranteed.