Margin Points - Arnold Engel<br>Shoeshine boy buys the index<br>June 11, 2026 · Essay #84<br>What happens when the shoeshine boy starts buying the index?
The famous Kennedy family lore is that Joseph P. Kennedy Sr., in 1929, heard a stock tip from the shoeshine boy while outside the New York Stock Exchange. Kennedy saw this as a sign the market had peaked and exited his positions before the crash.1 Someone who shouldn’t be in the market was buying, so Kennedy got worried when that someone didn’t have more to invest in the market.
Index funds didn’t exist in 1929, so the at-least-somewhat informed shoeshine boy touted specific stocks. Before the Great Recession, index investing was around 15% of all mutual funds. Before the dotcom bubble it was under 10%. Now it is over 50%.
I think if the boy had said “I’m putting my money into index funds” the reaction might have been different. We’ve lost a signal.
I’m buying the S&P 500 seems, well, normal and responsible. This is according to tons of literature and discussion over the past 20 years. No matter how much flows into index funds, it is looked at as responsible.
In a market where you could buy zero-day options or speculate on prediction markets or trade crypto pumps, there is no more indicator of irrational exuberance in an index. We’ve seen stories like this around a lot of IPO events before:
Anna Watts, a 33-year-old public relations manager in New York, has stashed away $6,500 to buy SpaceX stock after it hits the market Friday. If she had her way, she’d buy even more. She tried to borrow $5,000 from her best friend and applied for a bank loan, too, but both turned her away.
It would be easy to think that Anna is the modern-day shoeshine gal, but she’s far from it. She’s earning and at prime investing age. Content related to finance for her has exploded on YouTube, TikTok and Instagram. She isn’t going anywhere. If you had shorted the market every time since meme stock era that someone was quoted like this in a newspaper, you probably wouldn’t be looking for shoeshine boys anymore.
Is it possible that the content and speculation options have actually sublimated the speculation away from the market? Did those who persistently hounded to get into private allocations and SPVs of Anthropic and OpenAI actually obviate some of the pent-up demand that might have flowed into public equities? By size, none of it matters. The current market cap for the S&P 500 is roughly $65 trillion.
Kennedy was picking up something else and trading on it. Shoeshine boys might have reason to want their money out because they shouldn’t have been in the market to begin with. Ultimately, that was an accelerant on the crash.
So who shouldn’t be putting more money into the market this time? Boomers hold 54% of all stock market assets today in the US, which is roughly $35 trillion of the S&P 500. If they start putting more cash into the market, rather than withdrawing as they age, or mortgaging their homes to get more juice, it would be time to pay attention.
In the past 100 years, we’ve flipped from the elder Kennedy trading on instinct from the young boy to now some of the best insight potentially coming from a young boy working at a golf club hanging around his elders.
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Footnotes
Also shorted the market, according to: https://www.pitzlfinancial.com/blog/ode-shoeshine-boy ↩
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