My Signs of Stock Market Euphoria

"Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria." ~ John Templeton 

Although U.S. Market are at all time highs, I still don't think there is euphoria, despite such claims by numerous pundits.

Here are my personal signs for euphoria that I will be looking for:

  • All stocks rise significantly for an extended period (at least 1-2 months).  Currently, there are still many laggards and falling stocks in the market.   During euphoria, people will buy any and all equities, driving up all stocks.
  • Family, friends and acquaintances initiate conversations about stocks and investing with me.   Almost no one I know wants to talk about investing and stocks.  Usually, I initiate a conversation since I am interested in what people think.
  • The bears capitulate.   I know several people in bear funds, or in all cash since they think the market is due for a big fall.  When they throw in the towel...
Although not a necessary sign, if my company stock starts gaining 40% a year, as it did in the 90s, I will assume euphoria has arrived.

For now, I think there is still quite a bit a skepticism, so the bull market may have a way to go.


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This is not financial or investing advice. Please consult a professional advisor.

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