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Tuesday, February 5, 2013

Retail Investors Rush In at Market Top, Let the Fleecing Begin

From the stock market lows of early '09, the Dow Jones Industrial Average has risen over 105% in slightly less than 4 years.

There are not many investment vehicles that allow you to capture 25% returns each year. Oddly enough, somebody has to pay that 25%. So who is it that pays? The money has to come from somewhere doesn't it?

People that get in- far too late, mutual funds, state retirement systems. They ride the wave up and down- year after year. Fund managers talk about market timing like it's a terrible thing. They say stupid shit like investor/participants should dollar cost average in.

Did you know that the upper 5% of the uber wealthy in this country directly own 85% of the stock?

The bankers have been sitting chilly on all that stock they bought with free money from the Fed. They've been waiting for good ol' mom and pop to come in late now so they can sell and get the hell out. And just like trained pigs, here comes retail investors- 40 billion dollars worth of wasted capital entered markets in January. An all time record.

Buy high, sell low. Gargle, rinse, repeat.

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