Fully invested bears

Following yesterday's theme, here is another odd event that may add more signs to the market insanity that can eventually lead to an ultimate top prior to an epic bubble burst.  Something incredible happened this week. The combined market cap of Square, Spotify, Tesla, Zoom, and Shopify just surpassed that of Berkshire Hathaway! Chasing hot stocks to the extreme is always a phenomenon during a bubble. I guess everyone old enough should still remember what the tech bubble had done to the market back in late 90s and early 2000s. Even though we may be no near to that frenzy, we are definitely much closer now to that point with so much reckless chasing FOMO!  

Does this mean now it is the time to dump all the stocks and hide in the sand? Remember, a bubble can be formed and blown larger for a long period of time. No one knows how long it can last although it is a certainty that a bubble will be burst at some point. So it is a tradeoff between being vigilant and still actively investing at the same time. This reminds me of something the famed Morgan Stanley strategist Gerard Minack said once:"The funny thing is there is a disconnect between what investors are saying and what they are doing. No one thinks all the problems the global financial crisis revealed have been healed. But, when you have an equity rally as you've seen for the past four or five years, everybody has had to participate. What you've had are fully invested bears."

Yes, I'm probably a typical "fully invested bear" in some sense. More I see what's going on around the world in terms of the ever increasing debt load and phony money that has been printed/created every minute from the thin air, I'm really scared for the long term financial health of this world. This will certainly not end well. I keep reminding myself of this long term bearish view. On the other hand, I certainly don't know the exact timing when this long lasting burst will come. As such, I don't want to be like an ostrich to bury my head in the sand, pretending nothing is going on in the market. Not at all. So I'm still very active in the market but I'm just cautiously following the trend the market is giving in either direction. So I'm more like a swing trader, in addition to long term investors in quality dividend growth stocks for DRIP. 

So on the short term basis, I'm neither a bull nor a bear, but a swinger. This week is a typical week for my swing trading as I did both short and long trades within days. I think this will probably continue for quite a while as long as the market insanity keeps ongoing! 😎