Beware Rising Markets

As in any common betting scenario, when the table gets crowded, and the bets keep rising rapidly, you know its time to pack up and leave. Either the odds are poor or someone is rigging the game.

The same can be said for the stock market. When it rises relentlessly, and valuations need "pie in the sky" projections to sound even remotely reasonable, caution is warranted. Even without the possibility of rigging (which does explain most big price moves - e.g. the entire housing market during the boom), large upward price moves obviously greatly reduce your odds of a profitable investment. At some point every business reaches saturation and the hype dies down. There's no sense in trying to time the exit perfectly or to get greedy when the odds are poor.