Long ago, I was told how to use common sense to find out if a bull market is peaking. Yes beyond the PEs and PBVs. When the paanwala, rickshaw driver and the house maid, that is the low income group, start asking for stock tips to make money – you run with yours.
Now, I believe there is a new indicator in town.
A whole new set of people are willing to join in the great bull run. They want to sing in the chorus and have fun with the rising markets.
This new crop is that of analysts and investment advisors.
I am informed that there are hundreds of individuals who have discovered their light within. They are looking to register and get licensed under SEBI Investment Advisers and SEBI Research Analysts regulations.
That’s not the most interesting part though. The most interesting part is that a large part of these seekers do not have the required qualification criteria to meet SEBI’s licensing norms. Now if you are wondering, SEBI wants the advisers and analysis to be either Post Graduates in a related field OR be a graduate but with minimum 5 years of experience in the securities market.
This new interest group is almost entirely made of engineers or those from non-finance background. They work in engineering, power and software companies and have been doing investments on the side. They need to now back up the qualification part so that they can receive SEBI’s stamp.
But why are they getting into this investment advice business?
So, these smart minds have over the past 2 to 5 years been ‘trading’ in the market or advising their friends/family on where to invest.
Their calls/tips have delivered nice to handsome returns. They now feel it’s time to become a professional.
They want to help other people make money by giving tips, advice – not just on stocks, but also on Weapons of Mass Destruction – futures and derivatives.
Well, the smell of the money is irresistible too.
With this, I have now no doubt left that we are in a bull market. Going forward, there’s going to be an enormous amount of bull crap that we will have to deal with.
As for you, an adviser who has only been brought up on watching bulls can be a dangerous one.
An old saying goes as “a rising tide lifts all boats.”