The story goes like this: shortly before the Great Crash of 1929 Joseph Kennedy (or John D. Rockefeller, or Barnard Baruch, take your pick) was getting his shoes shined when the shoeshine boy started giving him stock tips. The man immediately realized that, if even shoeshine boys were involved in the market, there was no one else left to buy. So, he sold all of his stocks and kept his fortune.
The above story is very likely apocryphal, but here are two very true ones:
- One afternoon in the early winter of 2000 yours truly had just gotten out of the suburban railroad station, when I spotted a lady street vendor selling cheap jewelry. What made me curious was that she paid no attention to the few potential customers looking at her merchandise. Instead, her ear was glued to a portable radio that was broadcasting a stockmarket report. It was the time of the insane dotcom bubble, so I immediately thought of the shoeshine boy. The bubble burst spectacularly shortly thereafter - top to bottom the NASDAQ index lost 80% (Chart 1).
Chart 1
- Five days ago, Reuters reported that a 12-year-old South Korean boy is the new retail trading icon. Dreaming of becoming the next Warren Buffett, he states: “Rather than going to good schools like the Seoul National University, I’d rather become a big investor.” You can't really blame him, he's just an impressionable kid, you say? Surely his parents have the good sense to set him straight? Well,no, they don't: " I wonder, in this day and age, whether a college degree would be all that important,” said Kwon’s mother, Lee Eun-joo. And that's even more frightening - or significant, in bubble-sign terms.
And lest we forget... Happy Valentine's Day!!
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