Dot-Com Insanity

This past Tuesday on my radio show, John Rubino noted this market has the feel of the dot-com insanity of 2000 with GameStop Corp. being the poster child for this nonsense.

Not only were young folks with little or no experience in the market buying with abandon anything with large short positions, but so too were some major players.

According to reports on Friday, nine investors, including large fund-running institutions like Fidelity FMR and BlackRock, plus some well-positioned individuals like Chewy co-founder Ryan Cohen, watched the value of their GameStop holdings soar more than $1 billion. That’s based on an Investor’s Business Daily analysis of the most current holdings reported to S&P Global Market Intelligence. It’s possible some of these investors may have boosted or cut their stakes since the rally.

Also on Tuesday, Michael Oliver put out an MSA note suggesting equity market bulls might be in big trouble. He noted that a weekly close below 3730 on the S&P would break the up channel in the price chart shown below. It closed at 3714.24, so the channel has been broken! He also warned that if the S&P closed below 3793, some structural damage would occur. So, you can check that bearish note off as well.

On Monday, I plunged into the GBTC again. but after pondering my past experiences in past bull market bubbles as well as the comments from John Rubino and Michael’s work, I chose to sell that position in favor of cash both in terms of dollars and in terms of Silver Bullion (PSLV). Combining the two, I consider my “cash” position to be 24.66% at the end of the week. I chose silver rather than gold, given the relative strength of silver to gold.

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