Market participants are often driven by hope and narratives, which causes them to overvalue assets with no underlying earnings or prototypes.

“what I'm trying to say to people is instead of the price of earnings, you know, like the lemonade stand is worth five times its its earning power, but the hope is worth a thousand times its earning power because nobody can do the math on it because there is no math to do.”

Selling stocks during a bear market is psychologically driven by a desire for the security of short-term cash instruments.

“what people are doing when they sell stocks in a bare market is they're buying a short-term instrument that gives them security in exchange for a long-term instrument that is very very risky.”

Market turns are best identified by observing when speculator positioning reaches extreme levels and the market fails to react to news in the expected way.

“What I have found is that at market extremes, at market turns, the the speculator positioning just gets way too extreme. And then should the it doesn't mean the market's going to turn, but should the market turn and all those speculators have to get out”