I was referring to this: “most of the smart money has diversified or left the stock market completely.” How do you know where “most of the smart money” has gone? Which investors are you looking at?
There are distortions in market sectors between main street and wall street, if one knows where to look, and what to look at.
You nearly always see buying sprees towards real assets when there are bubbles that are about to pop.
Whether that spree is in terms of buying companies (for cash flow), or real assets like real estate, mines, etc (i.e. blackrock buying up large swathes of housing, and engaging in acts that might be construed as price fixing rents; i.e. constraining supply letting housing they've purchased remain vacant) etc.
You follow the money, and pay attention to the upstream, actually productive companies that are inputs to the other companies.
Price can remain the same, or drop slightly when there are outflow trends. Those outflows can also be laundered as option contracts, which may prop up the underlying until the expiration. Many, probably even most, of the companies today on the Russel, and 500 are zombified. Cascade failures in inputs, from a credit or liquidity crunch are common and predictably worse for any company carrying high leverage ratios (which are most).
