Shoeshine boy, from P. Humbert (Updated)

March 20, 2025 |

I had a reverse shoe shine boy moment to day. A friend, who shouldn't talk to me about markets, talked to me: "Your boy Trump is crashing the markets. My portfolio …." I take such data points serious - in combinations.

Steve Ellison responds:

Similarly, my sister in October 2008 was getting 150 calls per day from clients asking, "Should I sell?" She worked at an insurance company that also offered investment services. My reaction at the time was, "Isn't anybody calling to ask, 'Should I buy?'"

Jeffrey Hirsch writes:

Still hearing a lot of “Should I buy?” Two weekends ago was asked if would come on cable biz Monday 2/24 to say I was buying mega cap tech. I declined and said I did not think is was time. Posted this that day.

Updates:

Nils Poertner writes:

valid observations here. good to pay attention to odd moves, anything strange (eg like bund move recently) - as there may be more odd things coming!! in other words, be like Alexander Fleming - who stumbled on penicillin by chance - and didn't bin the sample as he wasnt looking for it.

Adam Grimes comments:

I obviously understand the shoe shine boy/taxi driver point here, but it's worth considering that market psychology is not asymmetrical.

P. Humbert responds:

Hi Adam. there is high risk, that I initially heard about the old masters from your writings. I agree, that it probably has more weight for tops. I think, that is where you are pointing to? My friend has quite a good performance in being wrong. He called the the Bitcoin top being bullish and some more. He is a nice guy, just not for markets.

Adam Grimes agrees:

Yeah that's always been my thinking–a little more actionable with exuberance at tops. Bottoms tend to overshoot a bit more, on balance, so I think the shoe shine boy cries uncle a bit too soon.

Nils Poertner adds:

sometimes the crowd is right or they have a hunch but they don't connect the dots yet
eg. "a bit of subprime" in early 2008 - as sort of consensus view among your typical investor back them it was high time to position extra cautious.

Bill Rafter comments:

The “crowd” is mostly right, but the problem is that there are usually several crowds, and of course the composition of the crowds change. If you’re lucky, there will only be two crowds, the knowledgeable ones, and those “asleep at the switch”. The trading rule is simple: follow the informed ones, particularly if the uninformed ones are 180 degrees away. A classic example of this is the Commitment of Traders Report. Ideally the reporting specs will be one way, with the non-reporters the other way (and preferably short). Without the benefit of COT, you can identify best- and worst-informed with regression.

Comments

1 Comment so far

Lewis Paca on March 18, 2025 1:47 am
Markets have had a few plays like BTC, NVDA, and Mag 7 to serve as case studies in effortless market alchemy. With Musk in Washington manning the chainsaw, it gives the appearance of the grandest alchemist of them all working his magic. There’s no other entity on the planet capable of moving markets the way the US Government/Central Bank can, and when the public sees Tony Stark in charge, it starts to use the market as a scoreboard.

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