Are Stocks in a Bubble?

stocks, bonds, ETFs straight out of downtown Chicago. This is Zach's Market Edge. Welcome to Zach's Market Edge, the podcast about investing in your life. I'm your host, Tracy Rinek.

This week, I'm going solo again to look at bubbles. I've covered bubbles in the past, but I think the last one I did was the Bitcoin bubble, whether or not that was one. But now we have to start asking our stocks above all. Maybe there's some other bubbles out there too, including in housing now, which I didn't really think was a bubble, but I know many of you have been asking me to cover housing, but I'll just save that for a later date.

I'm thinking of looking into housing to start 2022. So tune in later for that podcast. But this one, I did want to focus on stocks because it's getting a little bit shaky out there. So for many years, I believed we were in just a bull market in the stock market, similar to the 1980s, beginning of 1990s, where stocks were going up, fundamentals are solid, earnings are on the rise.

It wasn't too crazy, not too much speculation, despite it being in a bull market. Things made sense. But when you start to get into the bubble question, that's when we have to consult the expert on bubbles, Charles Kindleberger, his book, The Manious Panics and Crashes. Now, I actually had the book again.

It wasn't my office during the pandemic. So I was without my Bible on bubbles, but I managed to go in the office a couple months ago. And of course, I snammed it and brought it back home. So I am in possession of the Bible again, of the bubble Bible, I guess you can call it.

And so I have been consulting it again. And that's not a good thing, right? I consulted it in 2017 when Bitcoin was going kind of crazy. And people were all buying Bitcoin and then going home to Thanksgiving and talking about Bitcoin with the families.

Remember that? And so Kevin Cook and I looked at whether or not that was a bubble and whether or not it followed Kindleberger's format about how bubbles work. And then now I kind of crashed. It ended in 2018.

Now we're back to New Highs again on Bitcoin, but I'm not really consulting the book, the bubble Bible for Bitcoin right here. You might have to consult it for some of the other coins, but for Bitcoin or even Ethereum, I'm not feeling like it's fitting into the model. But stocks, I'm a little more dubious. So let's talk about what's happening in stocks to start off.

So we've been on this run over the last four years now. So I took a look at the S&P 500 from 2018 through November 15, 2021. That's this year, November 15, 2021. So the S&P 500 is just kind of the standard large cap index that we use to kind of judge what's happening with the stock market.

You could use the triple cues or the Dow. And I'm going to talk about the triple keys in a second, but for just the general, you know, biggest 500 companies, the S&P 500 works for us. So in 2018, the total S&P 500 return with reinvested dividends, because that's the total return. So you're reinvesting those one to 2% you're getting with the S&P 500.

It actually saw lots of 4.38%. Then in 2019, it took off. This was pre-pandemic 2019 up 31.49%. In 2020, the pandemic year, it had the big sell off in March of 2020, but then came roaring back and finished the year up 18.4%.

In 2021, through again, November 15, because that's when I'm recording this, it was up 26.2%. So starting a little bit hot again here in 2021, and we haven't had any big correction at all this year, which is a little unusual. And that's making some people nervous. Now, we did see a 5% pullback in September, but it literally hit the 5% level for just one day and then rebounded.

We've not yet seen a 10% correction, which is normal to see in any of these bull years. It's actually quite common and regular, but this year we're not seeing it. So stocks are a little bit hot right here heading into the end of the year. I went back and looked at the S&P 500 for the bubble years that we now know are the bubble years, which is the late 1990s.

So I started that series in 1995. So in 95, it was up 37.58%. In 1996, it was up 22.96%. That was the year that Chairman Ellen Greensbend said irrational exuberance in his congressional testimony, 1996.

97 up 33.36%, 98, even though there was a big sell off in 1998 over the hedge fund, blowing up the Russian financial crisis and the impeachment of Bill Clinton, it rebounded to end the year up 28.58%. And then in 1999, the year everyone remembers as being this amazing year for stocks, it was up 21.04%. So not so great for the S&P 500 by 1999, but still a tremendous track record that I recently tweeted out about because if you had just been a 401k investor or an IRA investor and you just happened to have an S&P 500 fund and you were shoving money into there, like as a baby boomer or Gen X or starting in 1995, it basically was a transformational five years for your portfolio, like, you know, amazing returns and you may never or until right now, see that again. So just an incredible run for the S&P 500.

Then we know what happened, right? In 2000, S&P 500 was down, but down just 9.1%. Now, this is a total return. So that includes the dividend being reinvested.

Otherwise, it was down without the dividend a little over 10%, I believe. So 2001 down 11.89%, 2002 was the worst of the years down 22.1%. But it doesn't sound like it had in 2000 or 2001. If you own S&P 500 down 9%, that's nothing.

After being up, you know, a gazillion percent for the five prior years, you weren't doing too shabby even in the dot com blust as it's now called, even though it was down. So that's not so bad. But I took a look at the NASDAQ. So that's where most of the action was, as we all know, because of the tech stocks.

So in 2018, looking at a current situation, the NASDAQ was down just like the S&P 500. It was down 1%. This is the total return of the NASDAQ. 2019, it was up 37.96%.

2020, up 47.58, that's the pandemic year, up 47.58%. 2021 so far, up 25.6%. So some of those numbers starting to look a little bit more like the S&P 500 from the late 90s, right? Pretty hot numbers there.

But what did the NASDAQ look like in the late 90s? Let's take a look at that. What is the hotness that's where the bubble was? 1995, up 42.5%.

96, also up the same. That's when Alan Greenspan said, the rational exuberance, 97, cooled off a little, up only 20.6. But 1998, 85.3%, almost doubled your money in 98. And then you did double your money in 99 of 101.95%.

Then of course, you got hammered on the next three years. 2000, you were down 36.8, 2001 down 32.65, 2002 down 37.58. So if you were in the S&P 500, you didn't see as good a gains in the late 90s, but you didn't see as bad a losses. So obviously the area that is doing the bubble, in this case in the late 1990s, the dot coms or technology stocks, internet stocks, as we like to call them, at that time, those were huge winners and then huge losers on the bus.

The S&P 500 reflected a lot more different industries. And so some of that diversity helped it on the bus and, but heard it on the boom side. You still had transformational returns in the late 1990s, as I mentioned earlier. Now remember here in the 2021 era that the Triple Qs, as I mentioned in prior podcasts, if that's what you own to own the NASDAQ, just 10 stocks are now 53.4% of that index.

So that's pretty heavily weighted in a very small number of stocks. And remember Apple is 11.27% of that index and Microsoft is now 10.1. So together, they're over 21% of the total, just two stocks. So if they falter, the Triple Qs is not going to be a very fun place to be, even though it's fun right now.

But on a pullback, not even a pullback, but some kind of sell off, but bear market, you're going to be in a little trouble with this kind of heavily weightedness in this index. Now I went back and tried to look at the stocks that were the big drivers in the dot com bubble. And at the time it was like the tech titans were hugely popular by the end of the 1990s. So not really even the dot coms per se, even though some of them were going IPO and like doubling within a week of the IPO or whatnot, that nonsense was happening.

But it was really these big cap technology companies that had strong fundamentals. They had business. They were making billions of dollars. So why shouldn't they be going up right in this internet innovation period?

And of course, one of the biggest names, the one you did have to own back in the day was Microsoft. So I took a look from January 2nd, 1998 through January 3rd, 2000. So this is the hottest time period, 1998 and 1999, but before the market peaked in March of 2000. This was just the fun time Microsoft shares were up 239% during that time period.

So basically, a little bit hotter than the triple cues were during those two years, but not much. So kind of paralleling the triple cues, which makes some sense, right? As Microsoft was one of the big kuunas even back then in the triple cues. Cisco was the darling of that decade.

It shares were up almost 10,000% over that 10 year time period. But I looked at this one for those last two years as well. And these shares were up 447% during those last two years. So really getting hot at the end of this bubble period.

Intel was another one, but those shares were up only 125% for those last two years. So not super crazy on Intel at the end, but Qualcomm, another hotline that my friends and I all followed and I had a friend who was day trading Qualcomm at one point. And why wouldn't you? Because in the last two years of the 1990s, so January 2nd, 1998 to January 3rd, 2000, Qualcomm shares to grow QCLM was up 2,216% during that two year time period.

This is what you see in bubble type markets. You see Cisco up 447, you see Qualcomm up 2,216%. You see the spurts of hotness at the end in the last gasp of the bull market. So I took a look at some of the hot stocks of today and surprise Microsoft is among those again.

It's back. It's returned to its glory, right? I own Microsoft again in my own personal portfolio. I did not own it in 1998 to 2000.

So I did not jump aboard the hot train back then. But I did buy it on the sell off in 2000 and 2001. I was dollar cost averaging until I threw in the towel because it was so bad on the bus. So I've owned it for years, but I bought some shares pre pandemic.

I talked about it on other podcasts and over the last two year time periods. So that was 2020 and here in the 2021 and a little bit of 2019 because it's two year time horizon, Microsoft is up 126.4%. So it doesn't sound too crazy, right? Given what's been going on and how hot the overall market is, that's not so crazy.

Nvidia, one of the other hot darling stocks of the last several years and certainly now here in 2021. Again, Nvidia ticker, NVDA. I don't own this one. I have limited it, but I do not own it.

It's up 486.8% over the last two years, 486.8. And then of course, the ultimate darling of this boom period and the one everybody's talking about. Tesla ticker, TSLA now up 1367% over the last two years. Now I did spring that up and I just brought up the Qualcomm from the 1999 to show you that's at bull markets, you get these boom periods where things really heat up.

So let's talk about what is in a bubble market because Tesla being up 1300% doesn't necessarily mean you are in a bubble, not at all. But some of these things that are happening now on the stock market are beginning to give me pause after I consulted again. Kindle Verger's manious panics and crashes and his layout of what a bubble is and looked at what is happening now. I'm getting a little nervous about what's happening in our stock market.

So where do you begin with the bubbles? You begin. Kindle Verger would say and just the beginning, a bullish type market, but it's not yet in a bowl. There's some awareness that, hey, something's going on with whatever asset class it is, Bitcoin, housing, stocks, bonds, gold, jewelry, artwork, whatever it is, NFTs.

We should have that in there now. There's some awareness of it. And sometimes Kindle Verger says you start to get an event of some kind that kind of starts off the bull market. So your event could be economic innovation of some kind.

In the 1990s, it was the internet revolution, right? Maybe you get low interest rates for some reason. Maybe you have a pandemic like we are in right now, some kind of event that kind of starts things moving. Then you have a period of what is just, I call the bull market.

This is when things are bullish. People are getting in, but the fundamentals actually match up with what is going on. But you start to see some issues of bullishness creep in that are not just a regular bull market. So you might have some kind of loose credit situation like we saw in the housing bubble, where basically anybody who was breathing, but actually also some dead people could get a mortgage in the 2000s.

So you have a loosening of credit by banks. You have spending that increases because of loosening in credit. You also could have things like record IPOs, or in our case right now, SPACs. SPACs didn't really exist much until a couple of years ago.

So here with this innovation in finance, in tech innovations, right? And SPACs a new way to tap into the public market, a new way to get that VC type of funding. Maybe you get an excess of spending on venture capital. That too could be a way that starts to influence this bull market.

And you see these new ways of getting into the market, getting access to credit and money. So that starts to happen in the second phase in this bullish market. Then you get what many of us call the bubble, the fund phase, euphoria or media, as Kingleburger would call it, the media phase, when you start to see investors say, hey, all I need to do is buy that asset. All I need to do is buy a house and it'll double within a year.

Right? All I need to do is buy those five investment condos. And I can flip them for 50% more. That's easy because the credit is loose and I can go do that right now.

There's no way to lose. Right? You start to hear that. It's quote, easy, unquote, to get rich.

Start to have the Wall Street Journal writing articles about 25-year-old hedge fund managers who have private jets that actually happen in 1999 or here in 2021 talking about 25-year-olds, non-hedge fund managers, just normal investors with five, six, seven million dollar stock or cryptocurrency portfolios. So you start to see these articles about people getting rich quick. People quit their jobs. They decide they can live off their house.

This happened during the housing bubble. People in California, where their house was going up literally $1,000 a day, were taking out home equity, mortgages, loans off the house, and for like $100,000 because their house was going up more than that per year. So they would just take it out and live off of it because the asset was still rising. You also get people becoming full-time investors in whatever asset class that is.

So you might see it in housing flipping. You might see it as Bitcoin. I'm going to just invest in Bitcoin and that's it. I'm moving to Puerto Rico because that's the best tax place to go or whatever country it is that might have the best advantages these days.

You get people quitting their jobs to become day traders like we saw in 1999. To some extent, happening here again in 2021. You get greed. You get euphoria.

You get it's quote, different this time. Unquote. You get people on CNBC saying things like quote, I don't see how this can end. Unquote.

And this phase, Kindle Burger believes, can be very quick. It can only sometimes last a matter of months as we actually somewhat saw that euphoria phase in Bitcoin in 2017. It literally only lasted a couple of months where it soared and then crashed down. And then even in the dot com bubble, the actual euphoria phase wasn't really until basically 1999 was the worst of it.

And that's when you had people quitting and day trading. Similarly for the housing bubble, even though that expanded over a number of years, you had the worst of the speculation by 2006, 2007. And then it was over pretty quickly once that expanded and started a bus. So that brings you to the fourth phase.

Some kind of crisis or basically the bust. People start selling whatever asset class that is because they start to get a little nervous or the early investors finally decide to cash out. Whether or not it's in stock, like you see maybe with some Tesla insiders now, yes, they had a cash in for tax reasons, but you start to see these early investors, founders, people like that, starting to get out or take some games off the table. And sometimes the selling gains momentum.

And then in the crisis or the bust period, you have too many people trying to get out all at once out of that asset. And then of course, that pushes the price down even further. So in the housing bubble, of course, you started to have too many of the investors in the condo flipping, trying to get out all at the same time. And there just simply weren't enough buyers.

And so once the market grows up in that way, then you started to see people just throwing in the towel, you started to have foreclosures, it resulted in a huge bust in the housing markets, but in stock markets or other commodity markets, it can result in a quick crash type scenario where it comes down quickly. Now, at this point in the bust, there will be fake out busts. You will have a top and then you might sell off a bit. And then you think, oh, that's not too bad.

You've been conditioned to buy the dip. So a lot of people will buy that tip because no one really knows the top. I got a lot of people on Twitter in recent days saying, oh, of course, everyone knew in March 2000 that it was the top and they were selling already. Well, not many people knew.

There's like a hedge fund here and there that might have got smart enough to get out. But not many people can time that top because there's these fake outs. And think about the S&P 500 again. You're sitting there in March 2000.

And you are thinking, oh, the NASDAQ is hitting new highs again. Why wouldn't it keep doing that? It had hit new highs every year for the prior five, six, seven years, however many it was. Many, many times look at this year 2021 NASDAQ S&P 500, the Dow all hitting dozens of new highs this year.

So how do you know to pick out which one is the ultimate high? The new cannot. And again, there are these fake out. There'll be a decline.

It'll rally again, which happened in 2000. And that's why by even 2001, stock investors still weren't really sure that it was over. Maybe in some of the tech names, you had this inkling. But look at me, I was out there going, hey, this is a deal.

I'm Microsoft. I'm going to go buy some of these shares here. I'm buying the dip. I'm going to dollar cost average on my way down because the trip reviews were down 36.8% in 2000.

How much worse can it get? It's over. The sell off is done. These are on sale.

Oh, but it wasn't. And it wasn't again in 2002. So that's something to keep in mind to you. There are these fake outs in during this blessed phase where you can't really tell that it's really over.

And then you finally can tell it's over and then you get the bear market phase. And that would be post 2003 started in people's mind psychology changed. Investors end up hating whatever investment they were in. Those investments tend not to go anywhere for years and years because investors shun the investment that was a bubble.

The media also finds fraud. You'll find scams. Some people may go to jail during this period. And we did see that after the dot com boom, I as a lawyer was even involved in some of the SEC investigations that went on during that time period.

And then housing bust. There were people who went to jail for lending practices and other things that went on during that market. Bad appraisal fraud was happening all over the place during the housing bubble. So that scam was uncovered.

And the media really focused on the bust for many years in that bubble. So those are the faces. So now we know, but it doesn't really help us right? Because as I was just mentioning, we can't really time the top.

So what should investors do? So there's really no way to time it, as I mentioned. And you think you could, but there really is no way. But if you can't sleep at night, if it's making you nervous, if you've met your investing goal, those are times when maybe you should take some of your profit off the table, move to the sidelines.

Nothing wrong with taking profit in any type of investment ever. So keep that in mind when you're thinking about what it is you own and whether or not you should cash in on some of it. And I always think like you don't have to cash in all your shares. What if you cash in, you know, 25% or 50% and move that money to the sidelines and invested in something else?

You still have half your position that you're letting run. So if that bull is still charging, you are still in it. Also, if you have a longer time horizon, you can withstand some of these cycles that stocks tend to go through. But I do warn you that if you bought some of these stacks at the peak in 2000 or in the years leading up to it, you did not get back there for well over a decade.

In Microsoft's case, it took 13 years to get back to that high. That's a long time to hold what many consider to be a like quote dead asset. So just putting those things out there, it's never easy when you start to get an overheated asset class. And that's why I don't like it when an asset class overheats.

I prefer just the study issue goes bull market like we had from 1982 to say 1995, 96, because that's the time period when you and I can do really well. Now we've had this bull market since 2013 and we are in year eight of it right now. The average secular bull market lasts 11 years. But again, in 1982 to 2000 bull lasted 18 long years.

So you don't know when it's going to end, except if you're in year eight, you're clearly not at the beginning of it any longer. You're well on your way, especially when you start to see headlines like Fidelity or Robin Hood added record number of stock new stock accounts in the last year. That's not the start of the bull that's heading towards the end of the bull when people start to notice right under Kindle burgers. His criteria here and that doesn't necessarily mean you're in the euphoria phase yet just because people are noticing, but you're heading heading on to the later stages of his cycle.

So what else should investors do? There's no way to time it. You're probably sitting there thinking, well, Tracy, that sounds doom and gloom. I should sell everything and just move to the sidelines.

No, because there's always a bull market somewhere. So I did go back and try to figure out what were the bull markets while everything else was crashing in 2000 to 2003. It's not as easy as I thought because I thought, oh, I knew some areas that did well because I lived through it. And I know what did well is that decade went on, but some areas I thought maybe did well did not do well in that sell out.

So financials, I thought, well, were people hiding out in the financials because value stocks did get hot. But no, I took a look at JP Morgan from 2000 to 2003, JP Morgan down 29.3%. So that was not a place to hideout really during that time period. It did better than what the triple cues and some of these other the type names did during that three year time period.

But I wasn't actually making money during that time period either. I took a look at Walmart and Home Depot. I thought maybe some of the big retailers might be a place to hideout in, but no, because they saw it at the end of the 1990s. Home Depot was actually down 44.9% during that three year time period as well.

So it was maybe buying opportunity if you liked it enough to get in. Then as it sank down there in 2003, a lot of stocks were buying opportunities, but it wasn't really a place to hang out if you bought in right at the top there. It also declined. I took a look at some agriculture.

It's hard to get into like a fertilizers or things like that because some of the stock tickers have changed, but it did look at deer ticker DE. And during those three years, surprise, it was up 39.8%. So some of the money did rotate off to these big equipment manufacturers. But saying that, a lot of the share gains were in 2003 for deer and not in 2001-2002.

It basically looked like a shredded water during those years and then saw a big rally in 2003. Then you would have gained 39.8%, but you wouldn't have had a be patient with it during all that time. Now, a lot of drug sacks rallied big and had huge decades in the 1990s. So they were part of the bubble in addition to the tech and the dot coms.

But I took a look at Pfizer. What was happening if you had stayed in that one? So from 2000 to 2001, it wasn't too bad. It kind of just shredded water.

So it held onto its bubble-ish-type gains, but then it finally gave into the pressures, the selling pressures. In 2002, 2003, it sank. And so for that three-year time period, it was up only 3% during that three-year time period, but had been up huge in the 1990s. Really, the biggest winners of this start of 2000s were the areas that were ignored in the 1990s.

So what were those? Of course, energy crude hit new lows in 1998. And so that was a buying opportunity switching from the bear over to the bull in energy. But everybody ignored it because why wouldn't you with Qualcomm up 2000%?

But energy stacks, I took a look at EOG resources to grow EOG. Those shares from January 3rd, 2000 through January 2nd, 2004 were up 184%. So very nice gains given what was going on. Think about it with the triple keepers and even the S&P 500 during that time period, but you still saw a gain of 184% in EOG through 2004.

Another area that saw big gains and was a precursor to what was to come were the home builders. So Polte, one of the largest home builders in the country, PHM was a ticker. Mortgage rates were falling, 9-11 happened, and people were nesting at home. They started to spend a lot of money on their houses and they wanted new homes.

So Polte shares from January 3rd, 2000 through January 2nd, 2004 of 356% during that time period. I took a look at Toll Brothers, the luxury builder in 2005. The Toll Brothers CEO was quoted as saying, it's different this time about the mania going on in Florida, but that was in 2005. But if you got in in 2000 through the 2003 Toll Brothers ticker TOL, up 330% during that time frame, then the shares soared into 2005 right when Robert Toll was saying, it's during this time, it's a new paradigm.

I think that's what the quote was. It's a new paradigm. And so it soared in 2005. So from 2000 up through the end of 2005, Toll Brothers shares up 1,204%.

By January 2007, however, even though the housing bubble was still going, these shares had fallen off those highs, but still up 696%. But if you go look at that chart, they did peak in 2005 when we were hearing all the stuff about it's different this time. House flippers, house renovators, HDTV started those like flip shows. So the PLC, everybody was buying condos and trying to flip bomb.

This was what was going on by 2005 and the stock price even reflected that kind of mania. So that's another key thing that Kindle Burger talks a lot about in his book, is that once you have a bubble and you have this before yet in one asset class, look around, because you usually find it in another. So in this case, we had a euphoria in housing and looking around, it was also in the housing, the home builder stacks. So a lot of that money slashes around in these bubble investments.

And maybe that same thing is somewhat happening here again in 2001 as we see a very hot housing market. We see very hot crypto and NFT and art market and baseball cards at record highs. And now also stacks looking pretty hot here. So what can you do right now again?

Be diverse. If nothing else, the S&P 500 versus the QQQ shows you about what happened in the dot com must that even just that level of diversity can help you withstand a big selloff, at least a little bit better than you otherwise might have. Then also look for the value stack areas. Look for those areas not participating.

So what isn't participating right now? What is it that everybody kind of hates and doesn't want to own? Well, again, energy, it's energy again this time. So the XLE ETF is up 54% year to date here in 2021.

So you might be saying, what do you mean? It's not participating. It's already rallied. It's one of the best performing sectors of this year.

But this is just a bull rally with that. I don't see my friends at the family gatherings aren't telling me what energy stacks to buy. Not yet. So this is the bullish phase that we've entered into with energy similar to 1999, 2001 with the energy stacks.

They didn't hit euphoria stage until 2007, 2008, when crude went up to $150, $160 a barrel in 2008. And then we had the euphoric rallies in those stocks then. So energy is one of them. What else?

The banks. Nobody cares. Every time I do a banking podcast, you're all like, and so bored, Tracy, I don't want to own JP Morgan. I don't want to own any small community banks.

Those are boring and conference calls are boring. This may be, but this is an area of a lot of value right now because everybody is ignoring it. And it's been in a long-term bear market and could be coming out into a bull as well. So there is still that early phase when there's not that much awareness about the banks.

So that could be early innings there as well. So keep that in mind. We do have some signs of the overheating. So Tesla now is up two years up, 1,376 percent on those shares.

I know many of you love the stock. You've been in it. That's fantastic. But just a little bit of warning, given what we saw in 1999 with stocks like Qualcomm, up over 2,000 percent in a similarly short period of time.

And then we started to have these super hot IPOs where the fundamentals don't add up like Rivian up our, well, ticker Rivian. Many of you already know it. It's up nearly every day since it's IPO. It's one of the largest IPOs in history and it hasn't sold any cars.

And so it doesn't really have any earnings or not much revenue. But it's worth more than most of the other car companies including some of them combined. So we know the stories, right? When we start to get these kind of little bit absurd things happening in an asset class, then you have to start to wonder like what is going on behind the scenes.

And then I start to consult Kindle Burger to get some clarity on what is happening. Now again, it's almost impossible to time the top, right? So there was always this famous story of Sir Isaac Newton, right? How he was in the South Sea bubble in 1720.

So he was in the South Sea, mania. He did sell out his shares at 100% profit. And that was a profit of 7,000 pounds. That was a huge amount for back in 1700s.

And the mania continued to go on. So what did he do? He entered it again. This is common.

You get sucked back in fear of missing out, right? Because the bubble takes a while to expand and it takes a while to bust. So you feel like you're missing out and you jump in again. So he entered at the market top and he put in even more money this time.

So what happened to him? He ended up losing 20,000 pounds. So he gained 7,000. He made 7,000.

He ended up losing the 20,000 in the end. But this is common. We saw this many times with many of the bubbles, the late entry in or the fear of missing out because the bubbles can expand for far longer. There were people in 1997, 1998, warning about a stock market bubble.

And they had moved to the sidelines and they were not, right? Because we had several more years of huge, tremendous gains. That's what I meant about market timing. You can't really time it.

But you can time it based on your own goals, your own investing objectives and also your own risk tolerance if something is keeping you up at night. If you feel like you cannot lose whatever gains you have made, if it's going towards something that would devastate your life if it declines. So for instance, you put all this money into a fund to save to buy a house. What would you feel like if you lost some of that, some of your gains for your house down payment, things like that, keep those things in mind.

Also, a lot of money can be made in the euphoric stage just by trading, timing it correctly and getting in on the mania. I don't really recommend that. But I know some of you will try it or do it. Good for you if you can do it and get out of there with some gains.

But I'm starting to get a little nervous about the stock market. Pullbacks are good. We could cool off here if we get some kind of correction, which is a 10% decline. If we get a correction, I feel like that might bring a little bit more healthiness to this market.

And this bull then could continue instead of reaching into the euphoria phase of Kineberger's stages. So all we're trying to do is avoid that euphoria phase for a little while longer. But most bull markets than any asset class usually end up in that euphoria, the bust and the despair stages. They just do bull markets end on a bang, not a whimper.

And so this is just something to keep in mind. I feel like I'm going to do these bubble shows quite a bit. As I mentioned early in the podcast, I'm going to have to do one on housing possibly in 2022 to take a look at that and see if maybe something's going on there too. So yes, Kineberger's back on the scene.

He does have a addition. I only have the fourth addition. He died in 2003. So these are other people updating his book, similarly to what happens with Benjamin Graham's great book, The Intelligent Investor.

So keep that in mind that he's no longer with us, but I wish he was so that we could get more of his insights into what is happening. He did warn a bit on the dot com bubble because he did die in 2003. So he did see that, Mania. But I was wondering what he would have thought of the housing bubble.

And now possibly here we are again. So get his book. It's a little bit dry because it's a little more academic, but still very fascinating about the list of all the different asset classes that had bubbles. It runs again at gold, copper, agriculture, of course, the tulips, B-B-B-B should be on there, various artwork, like housing throughout the ages, railroads, it was many, many things.

So we're not alone. It's a good area to look at and keep focused on your goals. Now let me recap some of the stocks I talked about. So there's Microsoft MSFT appears to be involved again here in the bullishness of this next kind of goal that we're having.

Tesla, of course, TSLA is the ticker with that one. Qualcomm, that was formerly the Tesla of the dot com boom. QCOM is the ticker with that one. What else did I mention?

Well, there's a course in Vidia. That one's having a moment to NVDA. Of course, we have the recent largest IPO, Rivian, R-I-V-N. I'm kind of reluctant to even tell you the ticker on that one.

We had EOG resources. I talked about them. Polte, PHM, and Toll Brothers are the real estate, TOL, PHM. I'm sure you're wondering what's going on with them right here.

They're both dirt cheap, but people are still thinking it's peak earnings and that you shouldn't be in those stocks. So no bubbles going on with those two right now, but even though they have been moving, Toll at least has been moving higher in recent weeks, but might want to take a look at those. Then I mentioned JP Morgan briefly. What else?

Dear, I mentioned MDE. I think that covers all the stocks that I mentioned on this episode. Of course, the XLE is the energy ETF as well. You can check that one out.

I also like the XOP, which is an energy ETF for just the EMP. That would include EOG and its competitors in there. So that's just the producers. The explorers and producers are in the XOP and that is a little bit hotter than the XLE, but both have been good performers this year.

Again, I'm going to be doing a lot more of these shows. I feel like maybe not, but we'll see. Get a little nervous here and I'll be having some guests on as we continue on through the end of the year because the end of the year is here. So we got to cover what's worked here in 2021.

What looks good in 2022? I love these shows to look around and see where opportunity might be. And I'm going to have on some of our great guests, including John Blank. I'm going to try to have Shuraz Miyan on and Kevin Cook again.

So be sure to tune in. You can get us on Amazon Music. We're on Spotify. We're on Apple Podcasts.

Anywhere you get your podcasts, just Google it. You can also get us on Saks.com. We have a podcast page. Just click on the link up at the top where it says podcast.

You can get all of our podcasts, including Mina's really great ETF spotlight podcast. So definitely tune in to any of the podcasts on Saks.com and I'll see you again next week with some more stacks. This material is being provided for informational purposes only, and nothing herein constitutes investment, legal, accounting, or tax advice, or a recommendation to buy, sell, or hold a security. Do not act or rely upon the information and advice given in this podcast without seeking the services of competent professional legal tax or accounting counsel.

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