Financial markets look flawless and unblemished just before topping. but from the eyes of a socionomist (in this case my friend Neppollian) this flawless demeanour is what makes participants careless and fearless.
However to the trained and seasoned eyes it leaves many symptomatic clues which scars its fake flawless guise.
The symptomatic clues include, inclusion of new constituents to benchmark indices,high number of rating upgrades, issuance of outlandish six figure index targets,invention of new metrics to profess market’s relative cheapness, respected talking head of the market painting a rosy multi decadal future, narrow participation,crumbling number of new highs, record buybacks, galloping Midcaps, ignorance to crumbling cross assets like commodities, celebration of record market capitalisation, volatility bordering at historical lows, governments getting bolder and people accepting it as revolutionary, launch of tallest structures,opening of sky restaurants and biggest drinking holes, game shows offering largest purse money, outrageous art auctions, launch of large format homes, cars and entertainment consoles, competition among nations in announcement of mega projects,explosion in entrepreneurial start-ups, non financial publications running front page ravings on markets, people enlisting to live on other planets, governments
amending rules for a futuristic technology for the brave new world, rising belief in occult and metaphysical, falling belief in God, rising hemline and hero worshiping.
At tops, it is highly rewarding to be tracking symptomatic clues from trending non-financial happenings than only focussing on financial metrics.
India specific, I observe so may non systemic (non financial) symptomatic clues of a topping market:
Patel statue -Tallest structure, I had written about this in length https://www.zerohedge.com/news/2018-11-01/indias-social-mood-tallest-statue-world
Sky restaurant at Bangalore – obscene wealth display
Asia’s largest lounge bar at Mumbai – A sign of excess
Modi worshiping – Hero worshipping
Kaun Banega Crorepati ( millionaire game show) @ 7cr ( $1million) – highest purse money for a game show
India touted as a Start-up Nation – rise in entrepreneurial ventures by people leaving jobs…most ventures will die
A Keralite (part of southern India) becoming the first Indian to sign up for Mars – trying to champion a new world….and display of getting fame through wealth
Highest sales of SUVs, upsize campaign for 120-150 inch LEDs, 1 lac ( $1500) priced mobiles,several launch of 5cr+ (almost $1 million) flats in Mumbai with sky pools – producers reading the paying capacity of patrons wrong
People paying astronomical prices for double headed boa for health and wealth (occult) – belief in paranormal things
H S Raza painting bid at highest price ever – spending binge
I am neither a pessimist or an optimist, I believe in cycles and I believe study of Socionomics is very important if you want to become a great investor.
All of the above, socionomically happens at tops…. such moods can flip on a dime once the positive mood turns negative…..and the best gauge of social mood is stock market.
Did you experience or are you noticing any of the above symptomatic clues in your focus market?
Explained very well !! I am a believer of cycles too!!
Add another to the list…
https://www.bloombergquint.com/pursuits/as-the-rest-of-the-market-slides-ultra-prime-is-doing-just-fine#gs.b1_7k3Y