16-year-old day trader, Rachel Fox

You know the market is topping when the media puts out stories like these.

16-year old actress, Rachel Fox, placed 338 trades last year. She did well, a 30.4 percent return, but the market did well last year too -- though not as well, around 16 percent. Take out taxes from her return, say a third, because her returns would be taxed hard because of short-term gains, and her return drops precipitously, but still, to be fair, she did quite well. We also do not know if her returns exclude expenses, though I suspect they do.

Nevertheless, this reminds me very much of stories that come out when the market is topping. Remember the truck-drivers planning to buy their own islands during the late 1990's? Bull markets make geniuses of us all. They make geniuses of newbies as well -- Rachel Fox only started trading in November 2011. Either she's incredibly lucky or she's incredibly gifted. I'll reserve judgment and say she's incredibly lucky. She needs to experience a bear market and then a couple more.

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The market at any given point suits certain personality types best. But few personalities are mutable, few personalities can adapt to the market's ever-changing state. Thus, there will be plenty of occasions when a certain personality type that does well in one type of market loses his or her shirt in a different type of market.

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Source: http://goo.gl/tYt5W