Baron Rothschild, an 18th-century British nobleman and member of the Rothschild banking family, is credited with saying that “the time to buy is when there’s blood in the streets.”
This contrarian approach to investing is saying zig when others zag. Go against the flow.

A modern and the most high-profile disciple of this investing philosophy is Warren Buffett who has his take on the Baron Rothschild quote.

“Be greedy when others are fearful. Be fearful when others are greedy.”

Where should we be fearful right now?

This chart says it all:

After the stock market bottomed out in March at the start of the COVID-19 pandemic, Millennials have been storming the stock market in numbers never seen before – as evidenced by the chart above.

Fueled by commission-free trading and generous margins on trading platform Robinhood, Millennials have been driving stock prices to insane levels unsupported by any underlying economic fundamentals.

How are they doing this?

Although their investment amounts are smaller than average, they’re doing it in numbers. Without getting into too much technical detail, they’re using the magnifying power of call options in masses that – like a self-perpetuating machine – keeps driving prices higher and higher. When prices reach levels even too high for these reckless traders, they’ll start going the other way to crash prices.

We already got a taste of a mini correction in September, but almost every Wall Street analyst and expert is predicting an even bigger correction down the road.

The Greedy Are All On Wall Street Right Now… Be FEARFUL!

Want more proof to avoid Wall Street?

Warren Buffett himself is sitting out the chaos. Not only is he sitting on his hands, but, he’s selling – getting out before the house catches fire. His cash holdings have grown to $137 billion from $128 billion since the start of the pandemic.

What about those savvy investors who are avoiding Wall Street but not sitting on their hands?

Where are the smart investors putting their money? Savvy investors are doing what they’ve always done – Living by one simple investing formula.

Invest For Demand! 

Smart investors don’t speculate – chasing rainbows and unicorns on Wall Street and Vegas. They invest for demand – for products and services that consumers will always need, in good times and bad.

It may sound boring, but boring isn’t such a bad thing in the investment world. Investing in demand, in essential goods people need every day, isn’t a bad thing.

Procter & Gamble was one of the success stories of the Great Depression because it turns out people still needed soap – even in bad times.

Other industries that thrived during the Great Depression? Food, shelter, household products, healthcare, communications and security.

Be fearful when others are greedy. Right now the greedy are on Wall Street and you should be very afraid of stocks. But being fearful doesn’t have to mean hiding in your house until the storm passes.

There are essential products and services consumers will always need as the Great Depression proved.

That’s why investing for demand as a simple investing formula has never failed savvy ultra-wealthy investors.