#36: Insiders, Outsiders, and the Great Pandemic Bubble.
Your writing is just incredibly good. It took all of my willpower during this mania to avoid becoming an outsider bag holder, and I quickly learned not to stand in front of an oncoming train either, so I avoided the fate of the sorry skeptic too. A large part of this was due to voices like yours, wafting silently through the orgasmic shouting of the euphoric bulls. Thank you!
This analogy is fantastic! “But both biological viruses and social viruses spread easily through an uninoculated population. Perhaps it’s not a coincidence that the last true stock bubble came twenty years earlier - one full generation.”
Really super piece as usual. Particularly, with my 28 years in FM’s it rings exact.
Wishing you, health, patience and prosperity for 2023.
Hi Last Bear Standing, great article! Wall Street's brick layers - the insider teams bidding up stocks (like building a brick wall) have handed the market over to the demolition teams- the insider's charged with taking the market down. They are not done! Fed funds reaching 5.25% in a slowing economy will be the catalyst for the demolition teams to press the next leg down. They will be blowing up a bunch of good stocks. Like you, I believe that may be a good time to become constructive on high quality stocks laying in the brick rubble. However, I do have a substantial fear about the market heading much lower due to a black swan event like a confrontation with China. It's inevitable in my opinion. What's your view in connection with the timing of a scuffle with China? Or are black swans always unexpected debacles?
As always, thanks for this TLBS! I love the way you write things and the smooth reading. Even for foreign people whom English is not their native language, keep it up !!
Alwo, that’s why I’m always looking for insider ownership in my holdings plus small to micro caps space.
Are you ever good at breaking things down to an interesting and readable level. Well done.
Fun read TLBS!! For us old timers, “Pump & Dump”, as it was called, used to be the main game of “penny stocks” on the sheet. Now it is mainstream. Caveat emptor.
A nice article to ease into 2023. "See you in 2040" HA! A nice end note to get the grey matter working. Thanks TLBS again, for the effort you put in to make this content available.
And l thought Insider Trading was illegal
Nice post. Reminds me of something I would have read in Adam Smith’s Money Game.
So well written and on point. Lots of education for now and for the next inevitable bubble.
Like the other commenters, this piece spoke eloquently to me.
Perhaps in some future week you'll consider the other side of the coin? Are there any general principles or cogent observations related to those rare few occurrences of successful market disruption by a successful innovation? And every so often Black (and Gray) Swan events really cause profound permanent changes.
I’ve been reading your pieces for the last year and a half and enjoy all of them. In my 401k I’m only allowed to go long, and I can’t bet against these bad actors. Many employee 401k plans are set up to push you towards buying sector focused mutual funds or a low cost S&P tracking fund. You set it and forget it because the market Always goes up over time, they say. They also say you shouldn’t time the market. They also likely make a lot of money off of my regular contributions to many companies I have no time to actually research and determine if that’s where my money should be invested. Who is they? It’s everybody that controls the game that I’m forced to play to hopefully secure a decent retirement to live later in life. I’d like to hear your thoughts on how this game plays out and what could stop the music that apparently has a never ending source of energy to keep it going. If you have an article that touches on any of my babbling, please point me to it. If not, maybe write about it. Something I’ve asked myself before is why does publicly traded co. Exec A make 1000x what I do? Their company doesn’t even have to perform above average and their stock compensation keeps paying while my required regular 401k contributions make sure their stock keeps punching higher so they can overpay for their 6th vacation home. Can the US market truly go up forever as long as the government can keep inflation positive but low? Thanks for reading my long comment/rant!
These look like the same stock charts from 1996-2001 and 2005-2009, only the names have changed. Many stocks rise to the moon during a rollicking buyers market, but few have the staying power to orbit it for long and the vast majority crash back to earth. Witness Acrimoto, which peaked above $700 about 2 years ago and it now a sterling buy below $4...isn't it?
The fact is that you can buy stocks at any price and sell at any price. What the rest of Wall Street or the insiders are doing is irrelevant. It's what who you do that matters. Follow the fools to the moon and ride their tails as they crash back to earth. You must do something different when things get a bit too unbelievable.
Study charts from previous hard charging markets. The rise to immortality and the fall to reality is always the same. At some point, if you have made good buying decisions, the froth must be blown away and you sell some shares into the mania. Not always easy, but the big boys don't own the game.
Buy and hold, and hold, and hold, and hold? That is a different game if you choose to play it.
This is a master piece....You are Super Awesome! Loved this article. God Bless you!
I forgot I had already liked this article when it was published. In fact I forgot I had read it, even if the conclusions stay with me. I will read it again before 2040.
Thank you! Discovered you through your piece on the China Property crisis, lucky me. The way you write makes everything so easy to understand.