Last Friday, we talked about how artificial intelligence (AI) is, at heart, something simple: a set of rules and if-then statements. As such, AI can be very helpful in a simple environment, where relationships and rules remain constant, but it tends to stumble when those rules change. Waze, which is a great example of this, lives in a world of maps. It is very useful, but it fails when the reality doesn’t match up with the map. Any self-driving car will have to take closed roads, weather, and crazy drivers into account, which works well much of the time, but not always.

As I mentioned in part 1 of The State of the Market, today I’d like to take a side trip into a different area: artificial intelligence (AI). One of the key themes we see pretty much everywhere these days is that computers, or robots, are taking over the world. This “age of automation,” as I will call it, is often seen as the rise of the machines (think the Terminator movies) and the associated demise of human jobs.

After talking about where the bubble is and then Black Monday, there is something we must acknowledge: despite all the hand-wringing, the market is high and seems to be rising even further. Like the bumblebee— which, according to all sorts of sophisticated aerodynamic analysis, cannot fly—the market doesn’t know it can’t go higher and so it does.

October 19, 1987, is a date that will live in stock market infamy. Known as Black Monday, it marks the largest one-day loss in history, with the Dow down exactly 508 points (22.61 percent).

Have you noticed how hard it is to blow a bubble these days? Things that were once considered out-and-out, no-doubt-about-it bubbles now get a “meh, I’ve seen bigger” reaction. It seems we’re all a bit jaded.

One of the key points in my argument that things are actually pretty good—and likely to get better—has been that with a growing economy, companies are selling more and making more money. Rising profits, especially on a per-share basis, are the foundation for a rising market.

I am at the Commonwealth National Conference in San Diego this week, talking with advisors from all around the country. Similar to the Financial Planning Association conference that I attended last week, everyone here wants to know what the market is going to do. In the short term, I suspect it is likely to keep rising.

Yesterday, I was down in Nashville speaking at the Financial Planning Association’s national meeting. It was an interesting time! Speaking with the young man at the coffee shop, our conversation went something like this: “I’m from Alabama.” “How did you get here?” “Like everybody else, music.” Clearly, this is a one-industry town, from the convention center (the Music City Center) to the signs for the Grand Ole Opry.

As we close out the third quarter of the year, here’s what we know. It has been a great year and a great quarter for stocks around the world. We’ve seen a really good month for all areas except emerging markets, which pulled back a bit but still posted the strongest quarterly gains overall. Financial assets have been doing much better than expected across the board, and investors remain extremely confident this trend will continue.

Yesterday, I spoke with an advisor who told me that a potential confrontation between the U.S. and North Korea is creating a lot of fear among his clients. In fact, one client wants to sell everything and go to cash due to concerns over what might happen. I certainly understand this, particularly in light of the rising level of rhetoric from both sides. That being said, I don’t think we need to be as worried as all that.