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#48: Jim Stack On Charting A Course Through Stock Market Rapids

Superinvestors and the Art of Worldly Wisdom

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How to Survive a Bubble

You have three keys to surviving a bubble: be defensive early, avoid the intoxicating psychology and watch for confirming evidence that the bubble has popped. One of the oldest breadth tools was looking at the number of advancing stocks versus declining stocks on a daily basis. And we were seeing the greatest divergence in market breadth since 1929 leading up to the crash.

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