“Instead of buying low and selling high, you’re buying high and crossing your fingers” – Bill Gross
It seems everywhere you look, an asset class or index is trading at a new high. Stock markets around the world, cryptocurrencies, art works, bonds, real estate (more on specific cities in an upcoming post), collectible cars and watches and so many more…
Jean-Michel Basquiat’s 1982 painting of a skull brought $110.5 million at Sotheby’s, to become the sixth most expensive work ever sold at auction. This piece of art is only 35 years old. There is no logical explanation for paying this amount of money. This is not smart money at work, this is dumb money. The new owner hopes that down the road a new buyer will emerge and be willing to pay more, Greater Fool Theory.
Speaking with market participants in varied asset classes I get the feeling from them that the party is far from over. That you can almost invest blindly in many of these different assets and that all will be just grand. Don’t worry, be happy.
Been there, done that. This is not my first rodeo. Have been an active market participant myself for 35 years.
There is always an eerie calm before the storm. Just have a look at the VIX (fear index) – all time lows.
A good healthy 20% correction taking the Dow back to 17,000+ is in the cards. This will take other asset classes down too – much needed.
Keep your powder dry and be ready.
“Success breeds complacency.Complacency breeds failure. Only the paranoid survive.” – Andy Grove