No, markets reach their top when "shoe-shine boys start asking for stock tips" - Bernard Baruch
There's this famous story about how the US markets had soared very high-up when Baruch had gone for a shoe-shine. The shoe-shiner upon learning that Baruch was an investor, asked him questions about the markets with unbridled enthusiasm. Baruch got a very uncomfortable feeling over this enthusiasm, that was indicative of a mass-hysteria (which I am sure he had discerned in other places as well), so later during the day he exited all his positions.
The next day the market crashed !!!
I had a personal encounter with the "Baruch Indicator" shortly before the Jan 2008 crash, when waiters at this restaurant I used to frequent, came up to me and started asking for stock tips and what mutual funds they could invest in. They knew for a long time that I played the markets because usually I'd go to the restaurant with a copy of the DSJ magazine or some trading-related books. But that was the very first time when a large group of them cornered me for advice !
Well in a few days time the market tanked !!!
The Baruch Indicator is timeless I think - you can't go wrong with it :)
- There's talk of the European crisis - Am not mentioning any individual nation, because a different nation grabs the attention every other day.
- Folks are worried about the recurring danger of deflation in US.
- And the China scare
- And the wars of Gulf, Kashmir, South China sea, etc.
- And the potential spike in Oil