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Sign of the Top From Amelia IslandBy
Thursday, March 19, 2015
I spent most of the weekend at the Ritz Carlton in Amelia Island, Florida – where a 1960 Ferrari sold for a cool $6.38 million on Saturday.
Classic Ferraris are up 254% over the last five years... but it wasn't just Ferraris that people were buying. Heck, a 1973 Porsche 911 sold for $891,000 – and to you and me it just looks like, well, a Porsche 911 from the 1970s.
The Amelia Island car show over the weekend brought in a record $100+ million dollars in total car auctions...
An event planner I spoke with told me they raised ticket prices by 25% to $100, with a goal of reducing the number of attendees... If that was the goal, they failed. Take a look...
This was the scene Sunday morning, less than 30 minutes after the show opened. Folks poured in. And the crowds didn't let up until late in the day. I've been going to this show for years. This year was the busiest – by far.
Last weekend's event in Amelia Island showed me that American investors are no longer fearful. The prices and the turnout made me think that we are in the later innings of this stock market boom, where investors are becoming more willing to speculate.
The car market wasn't always this hot... The entire classic car market fell by double-digits during the financial crisis, based on the Historic Automobile Group International (HAGI) Index. But this weekend shows that times have changed...
The wealthiest in America are flush with cash. They've made good money in stocks so far. And they're using their gains and their optimism to boost prices in classic cars (among other assets).
The U.S. stock market celebrated six years of this bull market earlier this month. The fun doesn't have to end tomorrow... But this weekend showed me that we are no longer early in the boom.
Massive crowds, high prices, and strong optimism at a vintage car show are something you'd see closer to the top of a market than the bottom.
To me, this weekend was another sign of the top... In my opinion, we are closer to the end of the great bull market in stocks than the beginning.
Good investing,
Brett Eversole
Further Reading:
Dr. Steve Sjuggerud and Dr. David Eifrig both see more upside in stocks. Find out why in these essays:
The market is close to record highs... Does that mean the market is overpriced?
Find out why rising rates don't spell doom for this bull market...
Bears who cling to the 10-year CAPE ratio as evidence that stocks are overpriced are missing an important point...
Market NotesTHIS HUGE, STEADY TREND ISN'T SLOWING DOWN Today's chart looks at one of the steadiest uptrends in the stock market...
Regular readers know we're proponents of investing in "picks-and-shovels" companies to profit from sector and commodity booms. Picks-and-shovels providers don't bet the company on one project... They sell vital goods and services to an industry (read our educational interview about it here).
As we've covered many times, the health care industry is booming right now. The Baby Boomer generation is increasing its health care consumption. Plus, Obamacare is boosting demand. This is great for investment funds like the SPDR S&P Health Care Services Fund (XHS). It holds a diversified basket of picks-and-shovels providers to the health care industry.
As you can see below, business is booming. XHS is up 100% in the past three years. What's even more remarkable about the trend in XHS is its low level of volatility. Despite the big rise, XHS has been 20% less volatile than the overall stock market over the past year. It's one of the steadiest trends in the market today.
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