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April 26, 2024 | What’s Behind: “Sell in May and Go Away”

Bob Hoye has been in investment business for some 50 years, making him one of the more experienced researchers. His historical work has been thorough providing the first recognition of the fascinating transition from speculation in commodities to speculation in financial assets. It was controversial when Bob observed that “No matter how much the Fed prints, stocks will outperform commodities”. In January 2000, the research team concluded that the Dot-Com Bubble would peak in March 2000. In early 2007, the team outlined that the credit markets would reverse in May-June 2007. They did and the stock market followed. The latest was the call in early October for the Bitcoin Bubble to complete in December. Bob’s essays and speeches on political change and on actual climate change have been widely circulated.

There is considerable history behind the gem of stock market lore to “Sell in May”.

The real explanation is readily provided by the record of Great Bubbles as they occurred in the London financial markets. There were five to the 1929 example. Four climaxed in May. And one, the infamous 1720 South Sea Bubble climaxed in June. Other Bubbles completed in May of 1772, 1825 and 1873.

First was the irresistible climax as the excited crowd bought in May, then the market corrected during the summer months. Followed by a crash beginning in late September. Horrendous liquidity problems were usually cleared by November. One distinction was that the 1825 Crash did not clear until January 1826

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April 26th, 2024

Posted In: Charts and Markets - Bob Hoye

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