Klapaucius' Shoe Shine Boy: Stock Market Euphoria and the Missing October Crash

Investor euphoria: The stock market fever still waiting for its black October

A friend who never talked about business opens Trade Republic and says he invested "some amount." A content creator recommends another investment app between makeup tips. And the S&P 500 is at all-time highs. This scene has a classic name: Kennedy's shoe shine boy parable, where the man polishing your shoes gives you stock advice, signaling the end of the bull run. At the start of this discussion, the question was whether the crash would happen in October. Weeks later, the tacit answer is different: the index keeps rising, and the doomsayer is left with an unfulfilled prediction.

What began as a bubble warning has turned into an inventory of certainties and skepticism. Some predict a -25% drop before year-end, while others recall we've had three and a half years of continuous gains despite runaway inflation, oil at $100, and rising interest rates. The problem, argue the skeptics, is that this cocktail hasn't burst in months. Meanwhile, money keeps flowing in.

The €300 investor and the trendy app

The first objection to the euphoria narrative is scale. Many newcomers aren't moving significant capital: they deposit €300, leave it there, and withdraw when changing phones. It's not an army of speculators, but a mass of curious people with an account and push notifications. Broker registrations surged since the pandemic, but the percentage of the population investing remains low. However, sponsorship campaigns by platforms among Spanish content creators are massive.

The second nuance is structural. Rotation from real estate into funds, ETFs, gold, and crypto exists but is minor compared to the weight of property holdings. Those with wealthy families still prefer buying apartments over watching indexed funds. The shift is real but slow, not a stampede.

Why the stock market doesn't fall even though everyone expects it to

Here lies the core issue. The market holds up because the alternative is worse: with cash depreciating in banks and unchecked money printing, exiting the market has a cost. Those inside don't sell out of antiestéticar of inflation; those outside look at highs and distrust them. The result is a market sustained by fleeing cash rather than conviction.

The bullish argument rests on uncomfortable data for bears: six months ago, amid a geopolitical episode in the Middle East, stocks plummeted, only to recover and break records two months later. The memory of that rebound acts as anesthesia. Each correction is seen as a buying opportunity, so the index is up 15% in euros year-to-date, according to calculations discussed.

30-year bonds, gold, and bitcoin as safe havens

The pessimistic scenario doesn't suggest the S&P 500 will go to zero—that would require a nuclear catastrophe—but rather a forced adjustment. Sky-high 30-year bond yields offer two exits: either continue printing money causing hyperinflation, or let the crisis surface. In this framework, cautious investors prefer physical gold and silver reserves, plus bitcoin and some altcoins. The skeptical response is quick: crypto is just "ones and zeros on a USB drive," valued by trust, not substance.

October 12th and other prophecies

As expected, the conversation drifts toward apocalyptic calendars. A prophecy by Mormon bishop John Hyrum Koyle about a sudden stock market crash on a Monday holiday weekend is resurrected, coinciding with October 12, 2026, which falls on a Monday and is a US holiday. Another prediction by San Bernardino regarding a major autumn recession is added. This material is folklore, treated as such: no one moves their portfolio based on a 15th-century omen.

More operational is geopolitical noise. Aircraft deployments and imminent attack risks fuel theories that big news will arrive on weekends, with markets closed, opening Monday in red. So far, the market's response has been opposite: ceasefire, everything invented, and up again.

Spanish banks and the x10 nobody saw coming

The most striking case recently isn't a drop, but a surge. A colleague entered Spanish banks in 2023 and has accumulated a x10, excluding dividends. Another similar case mentions €50,000 turning into a x5. Entering Spanish banking then required nerve, and those who did now seem like geniuses. The reasonable doubt: is the x10 real or just number juggling? Unicaja appears as the star position.

Real 15% inflation and those staying out

The analysis concludes not with a crash, but erosion. With estimated real annual inflation of +15%, the problem isn't for speculators, but for those with nothing invested. Stocks may correct sharply, wiping out inexperienced investors in one go, as always, and rise again. But idle cash loses value every year, without headlines or prophecies. With these elements, black October still hasn't arrived. And the shoe shine boy, for now, keeps giving advice.