The shoeshine boy indicator
The story took place in 1929 : Joseph Patrick "Joe" Kennedy, Sr. JFK's father, claimed that he knew it was time to get out of the stock market when he got investment tips from a shoeshine boy. On that moment Joe Kennedy had the intuition that we were at the end of the bull market and subsequently he decided to short the market and became .. multi-millionaire !
Ever since, the shoeshine boy has been the metaphor for "time to get out"; for the end of the mania phase in which everyone, even the shoeshine boy, wants in.
More recently, you all probably knew a shoeshine boy or a taxi driver that invited you to invest in 1999 or 2000 in the tech sector or another one that considered that an investment in the bank sector was very safe even in 2007 ?
Today I hear a lot of "non-professional" investors considering "Bitcoin" as an investment opportunity, and in the same time "non-financial" newspapers writing articles about this "cryptocurrency". Would Joe Kennedy consider that as a shoeshine indicator? I don't know but in any case it's time to be vigilant.
In conclusion, it's interesting to remember the explanation of Joe Kennedy's success, he said that he survived the crash "because he possessed a passion for facts, a complete lack of sentiment and a marvelous sense of timing". So ask advices to professionals in order to avoid the Shoeshine boy (bad) experience !
Thanks for your time, don't hesitate to share this aricle with your network.
Sébastien Van Passel