Bubble

Insanity News!

Micron, the WTF AI Mania Chart of the Year

by Wolf Richter • May 27, 2026

The stock of memory chip maker Micron Technology has a history of fantastical mania spikes that then collapse. So now there’s another fantastical mania spike, but it’s an AI mania spike, and everything else pales compared to it. Since the low of April 3, 2025, Micron’s stock [MU] exploded by 1,315%, and its market capitalization exploded from $72 billion to $1.01 trillion. Over the past 12 months, shares exploded by 854%. Yesterday, they spiked by 19%. Today, they’re up about 2% at the moment, at $916 a share.

But for Micron, spikes have invariably been followed by collapses.  

For example, from September 1995 to July 1996, the stock collapsed by 82%; and from Micron’s Dotcom Bubble’s peak in July 2000 ($95.13) to December 2008, so in about 8 years, it collapsed by 98% to $1.85, most of which in the first two years. 

There were numerous spikes followed by post-spike plunges of 50% or more. 

But it took the shares 18 years (till March 2018) to exceed the Dotcom Bubble high for the first time, and then shares plunged 50% again, well below the Dotcom Bubble high.

J. Paul Getty Quote!

Stock Market - "For as long as I can remember, veteran businessmen and investors - I among them - have been warning about the dangers of irrational stock speculation and hammering away at the theme that stock certificates are deeds of ownership and not betting slips.

The professional investor has no choice but to sit by quietly while the mob has its day, until enthusiasm or panic of the speculators and non-professionals has been spent. 

He is not impatient, nor is he even in a very great hurry, for he is an investor, not a gambler or a speculator. 

There are no safeguards that can protect the emotional investor from himself."

 Symptoms of Bull Market Top

Financial indicators:

1.)  High trading volume – panic buying.

2.)  Substantial buying of equity mutual funds by the public.

3.)  Shiller PE¹⁰ at historical highs with a low market dividend yield.

4.)  Mergers & Acquisitions and IPO’s calendar very robust.

5.)  Widening credit spreads.

6.)  Numbers of stocks making new highs are in decline.

Mass Psychology:

1.)  Investors use any reason to buy.

2.)  Making money in the markets appears to be easy.

3.)  Investors can’t wait to read their portfolio statements

4.)  Public infatuation with highly leveraged speculations.

5.)  The media describes the economy and markets as goldilocks (or any other word describing perfection).

6.)  Known contrarian investors are bearish – are seen as out of step with the new realities – or simply appear to be stupid or crazy.

7.)  Annuities, savings accounts, CD's, T - Bills/Notes are seen as dead investments.

Disclaimer

 

Headwinds

Residential Real Estate: 

New Normal is Negative Growth?

DYI:  There are four major macroeconomic reasons for residential real estate underperforming inflation over the next two decades.

1.)  Simply put home prices have outpaced incomes for years pushing the average age higher and higher for first time homebuyers to the age 40!  This has created a buyers strike with increasing numbers of young people giving up on purchasing their first home.  Fewer buyers than sellers will equal declining prices.

2.)  Boomer’s dying off with adult children selling the property to pay off their debts.  This is a Silver Hair Tsunami is now just started moving through this generation for the next 20 years and peaking 10 years from now.  Constant selling will have a depressant effect upon prices.

3.)  Out of control Federal spending by past and present Congress’ and Presidents has pushed up Debt to GDP to 122% forcing our central bank to monetize ever increasing amounts of debt thus increasing inflation that pushes up long term interest rates including mortgages.  Even if Congress and President by an act of God are bestowed with “That old time religion” for balanced budgets working off the debt to GDP ratio to an acceptable level is at the very least a 20 year affair.

4.)  Many States, counties and municipalities are in poor financial condition same as their Federal cousins, however they don’t have the ability to print their way out of debt.  Cut backs are already happening across the nation with homeowners leaving thus selling their property at near fire sale prices.  California is the poster child for out of control spending, regulations, fraud, and taxation.

Bottom Line:  The old adage of location, location, location will become the needle that will be required to thread.  Coming out ahead of inflation upon sale of a home will be tough sledding as the vast majority will lose to inflation.  Individuals and families who save and most importantly invest the difference as renters compared to buyers will be the financial winners over the next 20 years.

Disclaimer

This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.       

 

HANTA

In modern Israeli Hebrew slang, "hanta" (חנטה) means nonsense, lies, a scam, or complete rubbish.

It is often used to describe something as worthless, untrue, or "bullshit" (e.g., "Zeh hanta," which means "That's nonsense").

It is commonly used in everyday conversation to indicate that a story or statement is not true.

HantaVirus

 6

Asset

Permanent Portfolio

DYI:  Here is an offshoot to Harry Browne’s Permanent Portfolio with a few more assets staying true to 50% inflation protection and 50% U.S. dollar based assets using ETF’s and one closed end investment company (PEO).  Just thought I’d send this to you for your inspection and deliberation. 

Inflation Protection:

20% Gold symbol GLD

15% Real Estate symbol VNQ

15% Natural Resources symbol PEO

Dollar Based Assets:

20% Growth Stocks symbol VUG

15% Long Term Bonds symbol BLV

15% Property & Casualty companies symbol KBWP*

These assets should have a higher return than Harry’s standard 4 assets [25% Stocks, 25% Lt. Bonds, 25% Gold and 25% Cash] as cash (short term bonds) is absent.  However there are always tradeoffs in investing, this portfolio will have higher volatility upside and down.

 *Property & Casualty companies hold very large bond positions for any possible claims.  They have the advantage as inflation/interest rates go up they have the ability to increase premiums to offset those declines.  This creates an inflation/interest rate protection for their bond holdings.

This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

 

Bubble

News!

J. Paul Getty Quote!

Stock Market - "For as long as I can remember veteran businessmen and investors - I among them - have been warning about the dangers of irrational stock speculation and hammering away at the theme that stock certificates are deeds of ownership and not betting slips.

The professional investor has no choice but to sit by quietly while the mob has its day, until enthusiasm or panic of the speculators and non-professionals has been spent. He is not impatient, nor is he even in a very great hurry, for he is an investor, not a gambler or a speculator.

There are no safeguards that can protect the emotional investor from himself."

The longer a bull market lasts, the more severely investors will be afflicted with amnesia, after 5+ years many will believe that bear markets are not even possible.  Except for the brief hiccup during COVID scam the U.S. stock market has been a rocket ship since 2009.  This has ingrained into people that making money in stocks is easy and most importantly no price is too high in relation to sales, earnings, or dividends!  Just buy the S&P 500 index fund and enjoy 10%+ returns as far as the eye can see.

This insanity began since 2018 – that’s not a typo – the U.S. market has and continues to be powered up by massive government spending and until of late sub atomic low interest rates powering up animal spirits.  However the economic backdrop is in the process of change as government overspending has now come to a point where Treasury bond investors are demanding ever higher rates especially long duration buyers.  Chronic budget deficits equals’, Central bank monetization, equals higher inflation, equals higher interest rates, equals depressed price to earning multiples for stocks.  The doom loop for long duration bond buyers along with dismal stock market returns experienced from 1966 to 1982.

My investment approach is an offshoot of Harry Browne's Permanent Portfolio that maintains a fixed 25% invested in the above four asset categories listed above.  Harry's uncorrelated assets at the time were ground breaking.  Today it is taken for granted.  As much as I was impressed with Harry's work it always made me uncomfortable (made my hair catch on fire!) to always own 25% in each asset. When valuations are at extreme lows a greater percentage is called for and conversely at historical nose bleed levels significantly less (or none).

DYI’s approach working through our four assets and determining with a measure of accuracy the percentage invested depending upon long term valuations.  This is done by calculating our averaging formula for each asset.

If all three assets - gold, stocks, long term bonds, cash is our default position - are at fair or average value then each of the categories will be at 25% of the portfolio just like Browne's Permanent Portfolio.  However as prices move up or down from their respective mean our averaging portfolio will make the adjustment enhancing the overall return with less risk.

UPdated monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 5/1/26

Active Allocation Bands (excluding cash) 0% to 50%

48% - Cash -Short Term Bond Index - VBIRX

28% -Gold- Global Capital Cycles Fund - VGPMX **

 24% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

** Vanguard's Global Capital Cycles Fund maintains 25%+ in precious metal equities the remainder are domestic or international companies they believe will perform well during times of world wide stress or economic declines. 

  This blog site is not a registered financial advisor, broker or securities dealer and The Dividend Yield Investor is not responsible for what you do with your money.

This site strives for the highest standards of accuracy; however ERRORS AND OMISSIONS ARE ACCEPTED!

The Dividend Yield Investor is a blog site for entertainment and educational purposes ONLY.

The Dividend Yield Investor shall not be held liable for any loss and/or damages from the information herein.

Use this site at your own risk.

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.   

Non-scheduled mid month update!

 

Margin of Safety!

Central Concept of Investment for the purchase of Common Stocks.

"The danger to investors lies in concentrating their purchases in the upper levels of the market..."

Stocks compared to bonds:

Earnings Yield Coverage Ratio - [EYC Ratio]

Lump Sum any amount greater than yearly salary.

PE10  .........41.66
Bond Rate....5.50%

EYC Ratio = 1/PE10 x 100 x 1.1 / Bond Rate

2.00+ Stocks on the give-away-table!

1.75+ Safe for large lump sums & DCA

1.30+ Safe for DCA

1.29 or less: Mid-Point - Hold stocks and purchase bonds.

1.00 or less: Sell stocks - Purchase Bonds

0.50 or less:  Stock Market Crash Alert!  

Purchase 30 year Treasury Bonds! 

Current EYC Ratio: 0.48(rounded)

As of  5-18-2026
Updated Monthly

PE10 as report by Multpl.com

Bond Rate is the rate as reported by

Vanguard Long-Term Investment-Grade Fund Investor Shares (VWESX)

DCA is Dollar Cost Averaging.

Lump Sum is any dollar amount greater than one year salary.

Over a ten-year period the typical excess of stock earnings power over bond interest may aggregate 4/3 of the price paid. This figure is sufficient to provide a very real margin of safety--which, under favorable conditions, will prevent or minimize a loss...If the purchases are made at the average level of the market over a span of years, the prices paid should carry with them assurance of an adequate margin of safety.  The danger to investors lies in concentrating their purchases in the upper levels of the market.....

Common Sense Investing:
The Papers of Benjamin Graham
Benjamin Graham

 

S&P 500

Shiller PE at 40+

It’s a Long Way down Back to Average!

DYI:  Have you ever walked down a flight of stairs thinking you’re already at the bottom but you have that last step letting out that sound upon arriving at the bottom?  Or jumping down from 6 or 7 feet and after you did thinking you won’t do that again?

Valuations are an excellent downside protection method keeping the height ever closer to the ground avoiding hurting ourselves financially. 

Today the S&P 500 Shiller PE is back in the low 40’s range (41.66) along side their dividend yield of only 1.06%!  The average S&P 500 Shiller PE since 1871 is 17.38 represents a DROP back to normal – 58.28%

(41.66 – 17.38) ÷ 41.66 X 100 = -58.28% 

More importantly the time it takes for markets to make their respective round trip (top to bottom back to top) since we’re all mere mortals attempting to “Put it all together!”

This U.S. stock market mania that began all the way back to 2018 and really got moving into crazy land back in 2023!  Valuation players, especially at major turning points become contrarian bearish investors – are seen as out of step with the new realities – or simply appear to be stupid or crazy.

Welcome to the world of The Dividend Yield Investor!

TV

Wonderland!

 

$1 Million Savings Is A Bitch

Don't take us wrong, it's a good to accumulate $1 million savings. With that amount, you are now not that far from the top 10 percent of net worth among Americans. 

This turns out to be the worst amount of money that could make you uncomfortable! On one hand, having a $1 million net worth can feel like a "worst case" scenario for some. 

The idea that while $1 million is a significant milestone, it often leaves individuals in a "wealth purgatory" where they are too affluent for basic financial concerns but not wealthy enough to feel truly secure or "rich" in an era of high housing costs and inflation. 

Oh, just for your information, Federal Reserve’s Survey of Consumer Finances suggest the top 10 percent cutoff is roughly around $1.5 million to $2 million in net worth.  

In fact, these days, there are way more people whose net worth crosses the million dollar line are considering themselves poor. Rising inflation in basic needs, kids education and others is making today’s $1 million really not as significant as those sounding millionaires. Maybe it still looks like a big number on paper, but in real life it doesn’t go as far.

$1.46 Million to Retire Comfortably

This is yet another news: every year, some financial firms or organizations would put out such a number. This time, based on Northwestern Mutual, Americans Believe They Will Need $1.46 Million to Retire Comfortably, Up More Than 15% Since Last Year. That's $200K more than last year and in line with 2024 estimates.  

So of course, $1 million is not even enough to retire comfortably. 

The message is clear: 

Save more, don't be complacent.