7 ms·

Might be a good time to sell then. "While sitting in the shoeshine chair, Kennedy Sr. was alarmed to have the shoeshine boy gift him with several tips on which

Might be a good time to sell then. "While sitting in the shoeshine chair, Kennedy Sr. was alarmed to have the shoeshine boy gift him with several tips on which stocks he should own — yes, a shoeshine boy playing the stock market. This unsolicited advice resulted in a life-changing moment for Kennedy Sr. who promptly went back to his office and started unloading his stock portfolio. In fact, he didn’t just get out of the market, he aggressively shorted it — and got filthy rich because of it during the epic crash that soon followed. They don’t ring bells at the top, but apparently when shoeshine boys start giving stock advice it is time to head for the exits." https://www.businessinsider.com/how-to-spot-stock-market-bubbles-2017-10?international=true&r=US&IR=T https://www.businessinsider.com/how-to-spot-stock-market-bub...

deleted 6y ago
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czechdeveloper 6y ago
If you would sell every time something reaches all-time high, you would really not make any money.
- blaser-waffle 6y ago
  That would depend on when you bought it. Picked up 200 shares right before the peak? a modest gain, if that. Maybe you miss the worst of the downturn, though. Bought 200 shares 10 years ago and now it's peaking? Get them ducets, son.
  - ItsDeathball 6y ago
    I think the phrasing is hiding the logic. All-time high doesn't mean the peak. Quite often, all-time highs are followed by more all-time highs. Things can run quite a bit before a correction.
- IgorPartola 6y ago
  You by definition would make money. If you sell at max price that means you had to have bought it for lower than that. Assuming you didn’t buy for so close to max such that transaction fees are larger than your margin.
peteretep 6y ago
I have successfully used “has my mother heard of this” as a reason to sell a few times, notably Bitcoin and selling out a political bet position on Pete Buttigieg — essentially at the point my not-especially-well-informed mother has heard of something, I no longer have any kind of information advantage.
- WrtCdEvrydy 6y ago
  I worked in a company that has a decent mixture of technical and non-technical folks. I consider it like the DEFCON level. DEFCON 5 - Technical people who were aware of Bitcoin speaking DEFCON 4 - New technical people who were not aware of Bitcoin (we are currently here) DEFCON 3 - Business people DEFCON 2 - Non-technical people DEFCON 1 - Bathroom chats (last time I saw this was around the $17,000 mark)
  - lebed2045 6y ago
    very interesting mental model. Coincidentally enough, I got request from janitor (very nice person btw) to help him to buy bitcoin when it cost about $18k. I explained him to do not to, but the fact itself was clearly alarming.
    - LanceH 6y ago
      As a kid, our handyman told us to get out of the market in Fall '87. He enjoyed his work and was always driving a new corvette.
  - gruez 6y ago
    >DEFCON 4 - New technical people who were not aware of Bitcoin (we are currently here) It's 2020, who isn't aware of bitcoin?
    - WrtCdEvrydy 6y ago
      You'd be surprised, there's some people who still aren't aware and start asking some pointed questions when the news start saying Bitcoin reached new heights. Be careful of people asking where to buy a large amount of Bitcoin... since they probably just re-mortgaged their house.
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bmmayer1 6y ago
By your logic, this is precisely the time to sell non-gold equities -- with comments like Portnoy's "put any 3 letters together and buy that"[1], not the time to sell gold, which is behaving exactly as you would expect it to behave when confidence in other asset classes (especially the US dollar) is sinking. Disclosure: I own gold. [1]https://twitter.com/stoolpresidente/status/1272886621030014979 https://twitter.com/stoolpresidente/status/12728866210300149...
- imtringued 6y ago
  Unlike gold other equities are actually expected to net a return and therefore it is possible to invest into them in the long run. With gold the only way you can get a return is through speculation which means you must sell it regularly. With other equities you can just sell them as needed.
  - dragonwriter 6y ago
    > Unlike gold other equities Gold is a commodity, not an equity; gold behaves just like other commodities.
misiti3780 6y ago
I experience a very similar moment in line waiting to go through TSA a few years back listening to a group of agents (on break, trading w/ Coinbase on their phones) talk about bitcoin going to the moon (one of them said 100K/coin) when it was already hovering at 17K/coin. I knew how unrealistic bitcoin was back then, as it is now, and once I was through security, I promptly liquidated my entire coinbase account someplace near the peak
- oleganza 6y ago
  isn't talking about 100K/coin in 2017-2020 is as unrealistic as talking about 10K/coin in 2013-2015?
  - leetcrew 6y ago
    yes, but the point of the anecdote is who is saying it, not what is being said.
  - jakeva 6y ago
    I would say so. Same as talking about 1k/coin in 2011. That said, I wish I had unloaded near the last peak. I would have been positioned to quadruple my stake near the last low.
  - gruez 6y ago
    Not really. price going up 10x is much easier when it's around $10, than when it's $1000. The higher the existing price, the more money that's required to pump the price, so it only makes sense that 10k->100k is harder than 1k->10k.
    - IgorPartola 6y ago
      Why? I mean I got $10 in my pocket. You really think it’ll be worth $100-worth any time this year? Ford is currently trading at around $7. Think it can possibly go to $70 any time soon? You have to look at market cap, not individual price. Why would all the BTC that’s around be suddenly 10x the value it was a year ago? What would drive that?
ALittleLight 6y ago
Isn't it way more likely that the shoeshine boy was just repeating what previous clients had said rather than playing the market himself?
- thanhhaimai 6y ago
  And that's exactly the reason: when the information is so widely circulated, you no longer have the information advantage. The market should have priced those information in. At that time, it's best to exit. Otherwise, the investor is no longer "investing". It's plain gambling without information.
ta1234567890 6y ago
This anecdote illustrates how the market could be seen as a big society-level pump and dump scheme. The guys at the top invest early at a low price, then pump the investment downstream as much as possible, then dump when things start looking too much like a bubble (i.e. "the shoeshine boys start giving stock advice"). If enough people at the top dump at the same time, the bubble bursts and there's a crisis. Even if some of the guys at the top couldn't get out in time, they are unlikely to get ruined by playing the game. The guys at the bottom on the other hand, usually end up literally paying the price for their risk-taking.
- chrisco255 6y ago
  That would be true if the market didn't consistently outperform inflation over the long run. Dollar cost average...buy and hold. Markets are subject to irrational swings in either optimistic or pessimistic directions. Rich people go bankrupt too. For every short there's got to be someone with equal volume going long...and vice versa.
  - maest 6y ago
    > That would be true if the market didn't consistently outperform inflation over the long run. It should be pointed out that this is true mostly of the _US_ _stock_ market. Empirically, this isn't true of non-stock markets and isn't true of many non-US markets. Buy-and-hold is a popular advice in the US because of the rather unique bull run over the past few decades in this market.
    - chrisco255 6y ago
      Past few decades? It's been true for over a century. Even if you rode out the Great Depression and held your Dow index. Now, I'm not claiming the current prices aren't a bubble, but bubbles (booms and busts) are normal part of any market.
      - llampx 6y ago
        I saw an inflation-adjusted chart of the S&P 500 that showed we are basically getting back to even after the 2009 crash.
david927 6y ago
That story is quite funny because the true story is actually about how Kennedy Sr. saw the signs of the top of the stock market and got rich by selling his stock and buying... gold, which he later used during the depression to purchase distressed assets like real estate. The parallels between the 1929 crash and now are chilling.
- obayesshelton 6y ago
  Yeah, using this reference for Gold wasn't correct but what you said is funny/interesting!
  - david927 6y ago
    We always talk about 8 or 9 year cycles but never cycles which are every 8 or 9 cycles. In the ocean there are multiple frequency of waves which means sometimes no waves where they cancel each other out and other times where they combine. I think we're at the cusp of a giant financial movement which will surpass the 1929 crash. And in times of upheaval like this, a lot of fortunes will be lost but a few will be made. I just hope that we're generally richer now, especially with technology, that we can find a way to minimize the suffering.

deleted 6y ago

[deleted]

czechdeveloper 6y ago

If you would sell every time something reaches all-time high, you would really not make any money.

blaser-waffle 6y ago
That would depend on when you bought it. Picked up 200 shares right before the peak? a modest gain, if that. Maybe you miss the worst of the downturn, though. Bought 200 shares 10 years ago and now it's peaking? Get them ducets, son.
- ItsDeathball 6y ago
  I think the phrasing is hiding the logic. All-time high doesn't mean the peak. Quite often, all-time highs are followed by more all-time highs. Things can run quite a bit before a correction.
IgorPartola 6y ago
You by definition would make money. If you sell at max price that means you had to have bought it for lower than that. Assuming you didn’t buy for so close to max such that transaction fees are larger than your margin.

peteretep 6y ago

I have successfully used “has my mother heard of this” as a reason to sell a few times, notably Bitcoin and selling out a political bet position on Pete Buttigieg — essentially at the point my not-especially-well-informed mother has heard of something, I no longer have any kind of information advantage.

WrtCdEvrydy 6y ago
I worked in a company that has a decent mixture of technical and non-technical folks. I consider it like the DEFCON level. DEFCON 5 - Technical people who were aware of Bitcoin speaking DEFCON 4 - New technical people who were not aware of Bitcoin (we are currently here) DEFCON 3 - Business people DEFCON 2 - Non-technical people DEFCON 1 - Bathroom chats (last time I saw this was around the $17,000 mark)
- lebed2045 6y ago
  very interesting mental model. Coincidentally enough, I got request from janitor (very nice person btw) to help him to buy bitcoin when it cost about $18k. I explained him to do not to, but the fact itself was clearly alarming.
  - LanceH 6y ago
    As a kid, our handyman told us to get out of the market in Fall '87. He enjoyed his work and was always driving a new corvette.
- gruez 6y ago
  >DEFCON 4 - New technical people who were not aware of Bitcoin (we are currently here) It's 2020, who isn't aware of bitcoin?
  - WrtCdEvrydy 6y ago
    You'd be surprised, there's some people who still aren't aware and start asking some pointed questions when the news start saying Bitcoin reached new heights. Be careful of people asking where to buy a large amount of Bitcoin... since they probably just re-mortgaged their house.

deleted 6y ago

[deleted]

bmmayer1 6y ago

By your logic, this is precisely the time to sell non-gold equities -- with comments like Portnoy's "put any 3 letters together and buy that"[1], not the time to sell gold, which is behaving exactly as you would expect it to behave when confidence in other asset classes (especially the US dollar) is sinking. Disclosure: I own gold. [1]https://twitter.com/stoolpresidente/status/1272886621030014979 https://twitter.com/stoolpresidente/status/12728866210300149...

imtringued 6y ago
Unlike gold other equities are actually expected to net a return and therefore it is possible to invest into them in the long run. With gold the only way you can get a return is through speculation which means you must sell it regularly. With other equities you can just sell them as needed.
- dragonwriter 6y ago
  > Unlike gold other equities Gold is a commodity, not an equity; gold behaves just like other commodities.

misiti3780 6y ago

I experience a very similar moment in line waiting to go through TSA a few years back listening to a group of agents (on break, trading w/ Coinbase on their phones) talk about bitcoin going to the moon (one of them said 100K/coin) when it was already hovering at 17K/coin. I knew how unrealistic bitcoin was back then, as it is now, and once I was through security, I promptly liquidated my entire coinbase account someplace near the peak

oleganza 6y ago
isn't talking about 100K/coin in 2017-2020 is as unrealistic as talking about 10K/coin in 2013-2015?
- leetcrew 6y ago
  yes, but the point of the anecdote is who is saying it, not what is being said.
- jakeva 6y ago
  I would say so. Same as talking about 1k/coin in 2011. That said, I wish I had unloaded near the last peak. I would have been positioned to quadruple my stake near the last low.
- gruez 6y ago
  Not really. price going up 10x is much easier when it's around $10, than when it's $1000. The higher the existing price, the more money that's required to pump the price, so it only makes sense that 10k->100k is harder than 1k->10k.
  - IgorPartola 6y ago
    Why? I mean I got $10 in my pocket. You really think it’ll be worth $100-worth any time this year? Ford is currently trading at around $7. Think it can possibly go to $70 any time soon? You have to look at market cap, not individual price. Why would all the BTC that’s around be suddenly 10x the value it was a year ago? What would drive that?

ALittleLight 6y ago

Isn't it way more likely that the shoeshine boy was just repeating what previous clients had said rather than playing the market himself?

thanhhaimai 6y ago
And that's exactly the reason: when the information is so widely circulated, you no longer have the information advantage. The market should have priced those information in. At that time, it's best to exit. Otherwise, the investor is no longer "investing". It's plain gambling without information.

ta1234567890 6y ago

This anecdote illustrates how the market could be seen as a big society-level pump and dump scheme. The guys at the top invest early at a low price, then pump the investment downstream as much as possible, then dump when things start looking too much like a bubble (i.e. "the shoeshine boys start giving stock advice"). If enough people at the top dump at the same time, the bubble bursts and there's a crisis. Even if some of the guys at the top couldn't get out in time, they are unlikely to get ruined by playing the game. The guys at the bottom on the other hand, usually end up literally paying the price for their risk-taking.

chrisco255 6y ago
That would be true if the market didn't consistently outperform inflation over the long run. Dollar cost average...buy and hold. Markets are subject to irrational swings in either optimistic or pessimistic directions. Rich people go bankrupt too. For every short there's got to be someone with equal volume going long...and vice versa.
- maest 6y ago
  > That would be true if the market didn't consistently outperform inflation over the long run. It should be pointed out that this is true mostly of the _US_ _stock_ market. Empirically, this isn't true of non-stock markets and isn't true of many non-US markets. Buy-and-hold is a popular advice in the US because of the rather unique bull run over the past few decades in this market.
  - chrisco255 6y ago
    Past few decades? It's been true for over a century. Even if you rode out the Great Depression and held your Dow index. Now, I'm not claiming the current prices aren't a bubble, but bubbles (booms and busts) are normal part of any market.
    - llampx 6y ago
      I saw an inflation-adjusted chart of the S&P 500 that showed we are basically getting back to even after the 2009 crash.

david927 6y ago

That story is quite funny because the true story is actually about how Kennedy Sr. saw the signs of the top of the stock market and got rich by selling his stock and buying... gold, which he later used during the depression to purchase distressed assets like real estate. The parallels between the 1929 crash and now are chilling.

obayesshelton 6y ago
Yeah, using this reference for Gold wasn't correct but what you said is funny/interesting!
- david927 6y ago
  We always talk about 8 or 9 year cycles but never cycles which are every 8 or 9 cycles. In the ocean there are multiple frequency of waves which means sometimes no waves where they cancel each other out and other times where they combine. I think we're at the cusp of a giant financial movement which will surpass the 1929 crash. And in times of upheaval like this, a lot of fortunes will be lost but a few will be made. I just hope that we're generally richer now, especially with technology, that we can find a way to minimize the suffering.