A Sadie Berger Moment in 2025?

First off, what the heck is a Sadie Berger moment?

Let me explain.

In late December 1999 (during the peak of the Dot Com madness) an 89-year-old widow (Sadie Berger) called her broker wanting to know what tech stocks were all about.

Her reason?

According to Sadie, “all her friends were making a fortune buying tech stocks” …and she wanted in on the action.

Long story short, the broker talked her out of selling her bonds to buy tech stocks and just sit tight.

A little over two months later (March 8, 2000) the DotCom Bubble burst.

And Sadie, thankfully, dodged that bullet and was not affect by the carnage in the stock market.

Ironically (or NOT) Sadie unknowingly called the top of the market.

And the rationale behind her “wanting to buy tech stocks” was a glaring sign that most investors ignore.

Simply put, when people (old widows) want to do something that is totally out of character – or they have no business doing in the first place – it’s a warning to be cautious and/or run for the exits.

But, as history has proven, most people fail to heed the warnings.

 

Sadie Berger Moment 2025

 

Fast forward to this past week where we heard from Bill – a friend and long-time reader of our daily posts from New York – who wrote:

 

“A good friend of mine has made a ton of money on this one stock and I was thinking about putting $50,000 in it…what do you think?”

 

Since I have known Bill for many years, instead of responding to his email I called him on the phone.

 

Our abbreviated conversation was:

 

Me:  Hi Bill…so what’s the name of this ‘one stock’ you are thinking about investing in?

 

Bill:  I don’t know…but my friend really likes it and he’s made over 5 times his money on it.

Me:  So, you’re willing to put $50,000 in a stock that you don’t even know its name? *

 

(* Note: Bill’s entire investment portfolio in stocks is approximately $90,000)

 

Bill:  Well, yeah…and that’s why I’m hoping you can help me the with name?

Me:  Can you at least give me a hint at what the name is or possibly sounds like?

 

Bill:  Yeah, no, yeah…it sounds like dina, or maybe ninja.

Me:  Could it be Nvidia?

Bill:  Yeah, yeah, that’s it.  Thanks, James.  So, what do you think I should do?

Me: (sensing another Sadie Berger Moment) I wouldn’t take that risk.

 

****************************

 

 

 

 

Call me old fashioned, but it’s hard to justify putting over 50% percent of your net worth in any stock, even if everyone loves it.

Not surprisingly, the Presstitutes just issued the following headline on Nvidia…

 

Nvidia is poised for a significant earnings report on August 27, with expectations of a 53.1% revenue increase year-over-year. Analysts are bullish, raising price targets and anticipating strong demand for AI chips, despite market declines in anticipation of the report.

 

 

Moral of the story…

Sadie Berger wanted to buy tech stocks two months before they blew up.

And now Bill wants to risk most of his life’s savings on Nvidia based on a friend’s recommendation.

 

Remember, when people start doing things totally out of their character or nature, it’s time to be cautious and/or run for the exits.

 

Is Bill’s situation another Sadie Berger moment?

We’ll probably find out in a few months.

In the meantime, be sure to read our September issue of “Simplifying Wall Street…In Plain English” (HERE) where we will show you why another tech/wreck is likely in the near future.

Share this with a friend…especially if they suffered through the DotCom crash in 2000.  They’ll thank YOU later.

 

And tell them:

 

We’re Not Just About Finance

But we use finance to give you hope.

“And you shall know the truth, and the truth shall make you free.”

~John 8:32~