A Warning About Chasing This Bull Market

Zero Hedge | 4/29/2019 | Staff
jster97 (Posted by) Level 3
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This past weekend, we discussed the breakout of the markets to all-time highs.

The question I asked this past weekend was simply;

Bull - Market

“The bull market is back, but can it stay?”

When I was growing up my father, probably much like yours, had pearls of wisdom that he would drop along the way. It wasn’t until much later in life that I learned that such knowledge did not come from books, but through experience. One of my favorite pieces of “wisdom” was:

Warnings - Something

“Exactly how many warnings do need before you figure out that something bad is about to happen?”

Of course, back then, he was mostly referring to warnings he issued for me “not” to do something I was determined to do. Generally, it involved something like jumping off the roof with a queen-sized bedsheet convinced it was a parachute.

Argument - Everyone

My argument was always that “everyone else is doing it.”

After I had broken my wrist, I understood what he meant.

Investors - Market - December - Disregard - Consequences

Likewise, investors are currently rushing to get back into the market, after bailing out in December, with a near reckless disregard for the consequences.

Simply because “everyone else is doing it.”

Roof - Sheet - Parachute - Warning - Signs

So, before you go “jumping off the roof with a bed sheet for a parachute”, there are some warning signs to consider before taking that leap.

There is a funny story about a “defensive driving” class where the instructor asks the class how many thought they were “above average drivers.” About 80% of the class raised their hands. The funny thing is that all of them were in the class because of traffic violations or accidents. But more to the point, 80% of drivers cannot be above average. It is mathematically impossible.

Prices - Price - Period - Time

Likewise, in investing, prices must be both above and below the “average price” over a set period of time for there to be an average. To many...
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