Powerful secular bull markets will always have a group of esoteric, less than understood assets that capture the hearts of investors, causing ascents in price that sing to their souls. At some point, and we may getting close that point now, it becomes impossible to fight the suck. Smart money, dumb money, family money, institutional money, international money and even loose change in the cup holder get sucked into an acceptance that "I can only win and will never lose."
Investors finally succumb to the song of the markets when not only are their friends and neighbors killing it in the markets, but they see many so called "smart money" investor types substantiating that tingling feeling they are getting in their nether regions.
And that's the suck that proves irresistible: Individuals can maintain perspective on risk when their friends and neighbors are making money, but lose that perspective when individuals they regard as "smart money" substantiate how their friends and neighbors invest. With that twist of popular opinion comes all types of asset allocation decisions that are viewed in hindsight as reckless.
Greed is created through consensus opinion that evolves along an ascending intellectual framework. In other words, it spares nobody in how powerful the suck of capital is towards a particular group of assets. The fact that it is ascending and not descending makes individuals feel that they are making a prudent decision simply because smart money corroborates their behavior the more reinforced a trend in the market becomes.
While this bull market still has years ahead of it, there are asset allocation decisions that are being made currently based on a less than well thought out thesis created simply because friends and neighbors decisions are being substantiated by individuals regarded as being bright.
Fight the suck.
