The put-to-call option ratio is at the highest it’s ever been. Higher than before the crashes of 2000 and 2008.
You’ll recall, I’ve said this bubble looks like the one of 2000 and not 2008…well, this contrarian ratio shows that too.
In rare times like these,the masses think stocks can’t go down. They think it’s “easy money”. And what “feels like” the best of times, turns into the worst of times for them.
These end badly for them. They’re usually on margin. Have no cash. Are in overvalued stocks and they have no dividend income. They also have no positions that can prosper from bad times/falling markets. Thankfully, we’re set-up differently than the masses. The euphoria of the masses will turn into a panic for them. When they panic, don’t join them in their panic.
Buffett says that success can be had in markets by keeping your head about you when others lose their heads.