Contrary to popular belief, the top of the market (29,568 on February 12, 2020) wasn’t the real top of the market.
The real top showed up on January 9th when the DOW hit 28,956. The extra 612 points was purely fluff.
How do I know that?
I have a dear friend who called me on January 9th to ask my opinion of the market. He’s the kind of friend who’ll ask your opinion for help but has already made up his mind as to what he’ll do.
Do you know anyone like that?
Anyway, he started off saying: “James, I’m thinking of selling all of my stock in my IRA and putting it all in Facebook. What do you think?”
My response was: “Have you been drinking this morning?”
I asked him if he read our December newsletter where we said it’s time to take some money off the table and sit in cash. (The DOW was at 28,117 back then)
To make a long story short, he didn’t take my advice to not sell his other stocks to buy Facebook.
He sold his stocks and dumped all of the money into Facebook at around 218 per share – currently trading around 155.
Ironically (or NOT), one of the stocks he sold was the gun manufacturer Ruger (RGR) at 48.73 per share…it’s currently 46.24.
His rationale for buying Facebook was simple: “Everyone’s going to still use Facebook so it’s gotta continue to go up.”
Not only did this confirm to me that we were near a top in the market, it confirmed that Human Nature Never Changes.
And when people, like my friend, do really stupid things, it’s time to run for the exit.
On the flipside in our April edition of “…In Plain English” we show you what signs to look for that the markets are at or near the bottom….and why you need to be prepared to act.
This is shaping up to be the trade of the century that we’ve been talking about.
Don’t miss it. Get your copy (HERE).