One month after the dot-com bubble peaked, the market sent a warning shot…
It was April 2000, and stocks had collapsed 10% in just five trading days – falling 6% on the last day alone.
As the dust settled over the weekend, the New York Post ran the following headline…
“Margin Calls Tied to Big Sell-Off.”
The Post explained that the final day of the sell-off was made worse by margin calls.
In short, investors were overleveraged. They overborrowed to fuel their stock buying… and created a mini flash crash when they couldn't afford their losses.
Today, margin debt is back on the rise. The level of growth in margin debt is nearing all-time highs once again. But as we'll explain, that doesn't mean this bull market is over just yet…
This post originally appeared at DailyWealth.