Low-information ‘investors’ rule the stock market — at least until they lose every cent.

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Highly relevant article in an era of rampant e-economists, retired 25 year old Youtube trade gurus and best-selling pop-personal finance books.


This article really has explained soo much of my thinking for so long.. legit reminds me of my friends telling me the economy is going to be roaring back to life in a V shape recovery. Meanwhile, they’ve never even taken an economics course nor even read an economics book for that matter. They watch whatever talking heads on tv and take it like the gospel. I feel like I’m living in the movie Idiocracy.


As opposed to the high information investors that put everything in the s&p500?


I have several friends who have proclaimed everyone should get into stocks right now. I think volatility, the unknown of Corona and a second wave, And an over valued market that has completely ignored the unemployment and economic data coming out are good indicators to be very wary right now. Sell when others are greedy. This has all the signs of a bubble or at least a market propped up by new money that will cut and run at the first dip that lasts for more than a few days. We may have not even reached the top. But stupidity and inexperience knows no bounds.


It is this thought that makes me certain this is/was a market top: In 1929, the story goes, Joseph P. Kennedy, patriarch of the Kennedy clan, went for a shoeshine not far from his Wall Street office. Kennedy was stunned when the shoeshine man gave stock tips to him, a leading trader. He immediately returned to his office and aggressively short-sold stocks, making a fortune in the Great Crash. It is the clearly young, stupid and inexperienced investors piling into airlines, cruise lines, Hertz, Tesla, ZM and SPCE that make me certain that we are about to see a blow out drop even without the Covid problems. Unfortunately I expect it will be long and painful.