I have a rather cynical view of the proceedings.
I've never mentioned it online, but I'll tell you what I think. I think that anyone that can't see this top has their eyes closed or is hypnotized. Hypnosis is a requirement for a top, and like all the others, they are here in spades.
I know this will open me up to some heat, so I need to be specific. I look at charts. If anyone wants to look at charts, they can see 4 pretty standard moves on a long term chart; accumulation, up move, distribution, and down move.
One fellow I know likens these to the seasons of the year, which is not a bad metaphor.
In my experience, tops are accompanied by violent action, high volume, lots of hype, and prices that defied logic quite a while back in time. Technically, they are really easy to see. In fact, of the 4 moves, tops are the easiest to spot.
The thing about this one is that the thinking has become so short term that if you say you see a top, and the stock goes up a quarter, you are "wrong". Ask 20 people where the Dow was 4 years ago, I would bet that maybe one could tell you. Where was it 10 years ago? What does the chart look like? Who cares? This is Now, baby, things are different Now, it's a New Pair A Dime, get a loan, buy some stock, who cares about the company or the valuation, IT'S GOING HIGHER, jump on the train to the moon, it was up 40% yesterday, it could go up another 40% tomorrow! Yahoo!
What we have here is a top. It may not be fully visible to most people for 3 more years, I don't know. But it's a top.
When you get things like Maria and Joe giving short term trading advice on CNBC (yes, they do, and I'm not mentioning that there even is a channel on television that has nothing but live stock market every day...), the suckers defending their favorite on-line stock touts that blatantly pump and dump (50 years ago it was tip sheets and newsletters), advertisements that imply that if you get your own account at a discount broker you will become a millionaire by trading the short term moves, and other such psychotic nonsense, the writing is on the wall. This is too easy! I mean, anybody can get rich in the stock market! Hubba Hubba!
What you don't see is are the people that have held securities for 5, 10, 15 years, lots of securities, that are simply rotating out of stocks like they did every time before. They have really made a fortune. They don't care if the market goes to 10,000, unlike the CNBC folks who claim they have no influence on the market and then show a ticker that gives the to-the-hundredth moves towards the Very Big Number.
Who is the Greatest Fool? Not the people that are selling. Not Warren Buffet it appears. He says he's in cash. He can wait for 3 years if he wants to. He can wait for 10.
I fear for the Baby Boomers, like me. I think this top will last until the Baby Boomers have contributed whatever is left of their cash to the Great Stock Market Scheme of Things.
And then we shall look back on it, and Bob Pisani can show a chart of the top and explain how obvious it is to the traders he talks to on the floor of the exchange.
And then things will move on, as they always do, with a lot of good people that should have known better broke and destitute.
You can't call me wrong for about another 5 years, and I hope I am. But only people lie, charts do not. |
