Joe Kennedy reportedly said in 1929 that he knew it was time to get out of the market when the shoeshine boys were giving stock tips. Are we witnessing something similar today?
Ritholtz Wealth Management's Michael Batnick last week reflected on the example of his plumber, who told him he had bought Kodak at $9 and sold it the following day at $20 because he "didn't want to be greedy".
The plumber, Batnick added, had $130,000 in the market, his portfolio consisting of high-flying stocks such as Tesla, Visa and Amazon, and admitted he had "no freaking clue what I'm doing".
It's a great story, but calling tops isn't easy and anecdotal indicators aren't reliable. Batnick notes contrarians were also laughing when actress Mila Kunis announced in 2013 that she was investing in stocks. Far from topping out, the bull market kept going for another seven years.
Yes, some people are doing crazy things right now, but the day traders aren’t reflective of overall sentiment – 2020 is not 1929.