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"If it be now, 'tis not to come. If it be not to come it will be now. If it be not now, yet it will come -the readiness is all." Shakespeare. Hamlet and Horatio
SPY: What Market Tops Look And Feel Like, Is It Different This Time?
Summary
- Major market tops attract novice investors, while seasoned professionals buy at market bottoms, reflecting a century-old pattern grounded in human nature.
- The current market is greatly overvalued and has many elements present before the seminal 1929 Crash. The public may turn quickly from unwarranted enthusiasm to panic.
- Much popular market advice is misplaced just enough to be dangerous even to the sensible 60% now owning stocks (versus 4%) in 1929.
- Current market conditions may present a unique exception, with many investors reluctant to go to cash despite indications of market irrationality.
- I suggest owning defensive value stocks and increasing safe fixed income investment, but don't mistake consumer stocks and utilities for value stocks.
I am a retired professor, a retired investment adviser, and currently a private investor and full-time tennis pro. I bought my first stock in a custodial account in 1958. I am a student of history, particularly military and economic/market history. The intellectual passions of my retirement years have been markets, mathematics, and quantum theory. Recently I have found myself reading book after book on the thoughts and feelings of animals, and I believe they are subtly influencing some of my views. I have a cat I like a lot. I like to travel. I served in Vietnam.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of BRK.B, BAC, EPD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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