This is what a Bubble looks like...

Back in February of 2000, one month before the NASDAQ peaked and the Internet Bubble blew up, I was in a bar and I overheard four construction workers talking about their investments in Lucent Technology.  They were talking about earnings, EBITA, debt, etc...  They all seemed to think that they actually knew what they were talking about. I remember thinking that this was an imminent sign that the market was about to head lower. 

Not that I have anything against blue collar workers, as I am from a working class family.  But when people who don't typically buy stocks are buying them, there is nobody left to buy the stocks afterwards.   So they can't go higher anymore!  The bottom of the Wall Street 'Food Chain' has been reached.  The sellers then will be forced to be very aggressive and prices will inevitably go lower.  At the time Lucent was trading around $54.  By December it was trading around $10.  In 2002, it traded for less than $1.

So yesterday I was in a different bar (yes...I know...I probably spend too much time in bars) and I was discussing the market with a few friends of mine.  A guy who looked like a construction worker overheard us and introduced himself.  He proudly told us that he had just invested in Bitcoin and he recommended that we do the same.  He even told us about Hedge Fund managers that he had overheard discussing it at the local Starbucks who were investing in it and videos on YouTube that we should watch.

Now...I don't know anything about Bitcoin, but I do know a lot about human nature.  So when I got home I took a look at GBTC...the Bitcoin Investment Trust.  Yep.  Just as I expected...  It has 'Bubble' written all over it.  If this thing had Put Options I would 'sell the farm' and buy them.  But unfortunately, there are no options for this garbage.   And it is too highly priced for me to feel comfortable shorting it, so unfortunately there is no trade here for me.  But it's a great story to bring up later...when I'm at the bar...

GBTC US Equity (Bitcoin Investme 2017-09-13 13-23-48.jpg