Author: Dave.𝟎𝐱U

A hundred years ago, Rockefeller heard a shoeshine boy talking about stocks and thus escaped the peak, avoiding the 1929 Great Depression. This is a well-known myth of market timing. So, whenever people see the market bustling, they panic. Posts about stocks from sisters on Xiaohongshu have even become a famous counter-indicator, but we have a huge misunderstanding about this story.

"Tail-End Market" and the Pitfall of Blindly Guessing the Top

The so-called "tail-end market" comes from Livermore's metaphor. Livermore's famous saying is:

“The last eighth of the coin is the most expensive.”

It warns traders not to blindly guess the top. Later, people compared it to the three parts of a fish: fish head, fish body, and fish tail. Among them, the profit from the fish tail often comes with huge risks, advising everyone not to blindly follow the trend.

However, with the continuous development of the market, an increasing number of "tail-end market" , that is a surge in the tail end, has recently emerged. The rise in this type of market is often astonishing, far exceeding the low price of “the last eighth of the coin.” So, what is the evolutionary principle behind the tail-end market? How does the stock market reach its peak? Today we revisit Rockefeller's fable.

Revisiting Rockefeller's Fable: The Misinterpreted "Shoeshine Boy" Story

In 1929, on the eve of the stock market crash in the United States, the country was in the so-called Roaring Twenties, with the stock market soaring nearly 500% from 1921 to 1929.

John D. Rockefeller (some versions refer to his son John D. Rockefeller Jr.) went to a hotel in New York. While waiting in the lobby, a shoeshine boy was shining his shoes. During the process, the shoeshine boy suddenly started recommending stocks to him:

• “Mr. Rockefeller, you should buy certain stocks.”

• “This stock will definitely rise.”

• “I’ve made quite a bit of money recently.”

After returning to the office, he began to sell off a large amount of stock. Months later, in October 1929, the famous Wall Street Crash of 1929 occurred.

Why is this story so famous? It satisfies many elements of storytelling, such as the personal legend aspect, especially the prophetic image of a trader who can foresee the future from small details, which is often very popular. Moreover, the principle of this story seems to align very well with everyone's psychological intuition: when everyone starts discussing, it means emotions are overheated, indicating a bubble that is about to burst.

Core Essence: The Market Is Not Crashed by "Talk" but by "Capital"

Honestly, if we think about it, how could a stock be crashed by mere conversation?

The market does not reward cognition, only action, and does not punish cognition, only action. Talking is an exchange of cognition and cannot affect the market. What we need to look at is capital.

From the perspective of market structure, this story is actually observing: Market Participation and Marginal Buyer.

• The logic of the end of a bull market: it is not that the valuation is too high or the bubble is too big, but rather that there are no new buyers.

• Buyer Response: concerning the recent US stock market, the most important aspect is not how much people are talking about it or how many want to get in, but rather the actual release of buying volume.

When everyone starts to pay attention to the US stock market, admiring the rise, and itching to participate, this is not the end of the rise, but a precursor to the final push. Because those who are observing outside and whose attention has been drawn over have not yet genuinely put their money in. When they can no longer resist and real funds flood into the US stock market, the buying volumes will be released.

These new funds from retail investors will drive the last surge in stock prices, while the main traders coordinate the selling and hand over the chips to them. When they have bought all their money, there will be no one left in the market to buy. At this point, when the buying disappears, stocks can only fall. This has been the story in the market over the past two months.

Market Empirical Data for 2026: From Retail Entry to Information Diffusion Path

Since the end of April, alarms for a short-term pullback have already started spreading among experienced US stock traders, while the level of discussion about US stocks on Xiaohongshu and Twitter has gradually heated up. However, the entire May has shown quite impressive gains precisely because:

• At the end of April, retail investors had not yet put their money in;

• While in May, a large number of retail investors had already started putting in funds, even filling all their positions.

A famous example is from the crypto world: when Binance launched stock futures, crypto players eagerly rushed to participate in stocks. When this group of people, who had faced bans on normal investment channels, went through a lot of trouble to put their money in, who else would be left that hasn't bought? Once everyone buys in, who will be left to buy?

This is actually the information diffusion path of a bull market:

When marginal groups and those from lower tiers start paying attention, it's the beginning of the end; when they have all invested their money, fantasizing about quick riches, it marks the beginning of the downfall.

Historical Mirrors and Current Judgments on Buying Volume Release Progress

In history, there have been many similar cases. During the 1999 Internet bubble period, many taxi drivers began recommending internet stocks. A large number of people who had never engaged in investing opened trading accounts to speculate in stocks, and subsequently, the Dot-com bubble burst. Inattentive traders would simplistically attribute it to: too many people were talking, too much heat, hence the decline. But the truth is everyone had bought in, and with no one left to take over, the market fell.

Returning to the current situation, the release rate of buying volume is the most important indicator. So what is the current progress of buying volume release? It is hard to say, as it is a difficult metric to quantify. Especially after the Chinese government cut off the outflow of domestic funds, it becomes increasingly difficult to determine what potential buying volume remains unreleased.

Currently, it can be seen that essentially the first wave of buying volume has been released.

• Taking the crypto world as an example. Chuanmu ( @xiaomustock ) was a professional investor participating in the early stage of the bull market, whereas when he came to me, it was already the late stage.

• In the last two weeks, various US stock discussion groups and KOLs focused on US stocks have begun to emerge, clearly belonging to the marginal groups (no offense intended, teachers).

Countermeasures and Future Market Outlook

However, I do not believe it will drop directly, as the release of buying volume is not something that happens overnight.

1. Short-term support: Not all traders will choose to chase highs; many are holding cash and waiting to buy at the next short-term bottom.

2. Rebound expectations: This round of buying will support a rebound in the price following last Friday, but the extent and volume of this rebound are currently unknown, so caution is advised.

3. Profit-taking strategy: I have already addressed the recent profit-taking exit strategy in a post; last Friday can be regarded as the first appearance of sell-offs. We should start to gradually consider profit-taking.

Feel free to follow, share, and comment. The above content is for personal research and information organization only and does not constitute investment advice. Investment carries risks, and decisions should be made cautiously.