Whenever there are insane market moves at the end of bull markets, everyone who remembers the 1999 fiasco says “this is it” or “we are nearing a major top” and my favorite “parabolic rallies indicate the end is near.”
I agree with them.
If GME (GameStop) is not a marker that equity markets are near an important if not actually at an all time high for this bull market run, I do not know what is. Check out this quick snapshot this morning(via YahooFinance):
As I have said previously, there is no fundamental reason for this to happen. Speculators and bulletin board internet investors are engaged in the ultimate pump and dump, setting up some suckers to be the ultimate bag holders. Amazingly enough, some of these new “investors” who got lucky and hit on some of these crazy plays were not even alive for the 1999 speculative crash, so they think this is how the “new more modern” markets are efficiently run.
Whenever efficient capital markets are meddled with via central bank and government interference it is only a matter of when, not if, they implode in a sudden, violent move to the down side. Realistically, this market could easily see a 50-70% crash to wring out the excesses and return to some degree of sanity to complete the original deflationary correction which was not allowed to finish it’s decline in 2009.
Soon enough, maybe not tomorrow, but soon, they will learn as everyone who speculates wildly is like the bug that flies over the interstate eventually meeting a windshield. That is when the market top is in, when the losers who think investing is nothing more than sanctioned gambling discover that begging for a government bailout will not help.
Kids, have fun, but remember the bill is due when the man comes around.