This blog attempts to look at both anecdotal and technical evidence that a bottom or top has formed in the precious metals markets. The name comes from a story a famous trader named Bernard Baruch told, who was bearish right before the crash of 1929. When his shoeshine boy gave him a stock tip, he saw that as evidence the market had formed a top. Such anecdotal evidence is quite reliable at predicting tops in the longer run, although such evidence may only show the late stages of a bubble and not predict the final top. We will rely on other technical analysis tools, in addition to any anecdotal evidence, to help determine whether precious metals are too high or too low.
"Taxi drivers told you what to buy. The shoeshine boy could give you a summary of the day's financial news as he worked with rag and polish. An old beggar who regularly patrolled the street in front of my office now gave me tips and, I suppose, spent the money I and others gave him in the market. My cook had a brokerage account and followed the ticker closely. Her paper profits were quickly blown away in the gale of 1929."
~Bernard Baruch
