Checking in on our late-stage bull market scorecard… new IPO madness… margin debt hits record highs… the single-stock ETF explosion… why we’re still dancing (but closer to the exit)
Last fall, we introduced our “Crazy Map” – a framework for tracking the late-stage excesses that typically mark a bull market’s final innings.
The goal isn’t to call “the top” (an impossible task), but rather to monitor specific milestones that historically line the path to an eventual peak and bust.
Since then, we’ve had a handful of months to collect new data. So, what’s the takeaway?
Our environment is getting frothier, but we’re not yet at a “red alert” moment where investors should head for the exits.
Yes, we’re cautious, but we’re also aware that we’re in a moneymaking market – even more so because we could be near the top.
In October, we quoted legendary trader Paul Tudor Jones explaining this:
If you just think about bull markets, the greatest price appreciations always occur the 12 months preceding the top.
It kind of doubles whatever the annual averages, and before then, if you don’t play it, you’re missing out on the juice.
If you do play it, you have to have really happy feet, because there will be a really, really bad end to it.
Today let’s check in on our Crazy Map, update the scores where warranted, and talk about how to stay invested while keeping those “happy feet” ready.
A quick refresher on the Crazy Map categories
Back in September, we identified five categories that tend to flash warning signs during late-stage bull markets:
- Speculation over substance – Stock prices driven by narratives rather than profits
- Easy money and leverage – Margin debt and borrowing surging
- New financial products – Creative (and potentially dangerous) packaging
- Retail crowding in – Social media-driven meme stock activity
- Headline-grabbing deals – Mergers and IPOs focused on “buzz” over fundamentals
We scored each category using a simple traffic light system: Green (healthy), Yellow (elevated risk), Red (danger zone).
As of our last check-in on October 10, here’s where we stood:
- Speculation over substance: Red
- Easy money and leverage: Red
- New financial products: Yellow
- Retail crowding in: Yellow
- Headline-grabbing deals: Yellow
Two categories were already in the danger zone, with three more showing elevated risk.
Let’s see what’s changed over the past three months.
“Speculation over substance” update: IPO valuations reaching historic extremes
When we last checked this category, AI start-ups with little revenue were commanding triple-digit price-to-sales multiples.
We pushed this to full “Red” status after Jeff Bezos warned that “every experiment or idea gets funded” during bubbles, including a six-person company receiving billions in funding.
Well, the speculation has only intensified.
The 2026 IPO pipeline is shaping up to be extraordinary – but not necessarily in a good way. Here’s what’s brewing:
OpenAI is reportedly preparing for a potential late-2026 or early-2027 IPO at valuations between $830 billion and $1 trillion.
Yes, you read that correctly – potentially the largest IPO valuation in history, for a company that CEO Sam Altman admits he’s “0% excited” about taking public.
According to reports, OpenAI carries $1.4 trillion in outstanding obligations with data infrastructure companies. The company projects it won’t achieve positive cash flow until 2029, and only if revenue miraculously surges to $125 billion by that year – a tenfold leap from current levels.
Meanwhile,SpaceX is widely expected to pursue an IPO with recent private market activity valuing the company at around $800 billion. Elon Musk, who previously dismissed IPO speculation, recently called reports about a 2026 debut “accurate.”
Finally, Anthropic, backed by Google and Amazon, is reportedly laying groundwork for a possible 2026 IPO following a November funding round that valued the AI company at $350 billion.
The company reportedly plans to nearly triple its annualized revenues in 2026 – a projection that’s driving much of the valuation enthusiasm.
These aren’t the only massive deals in the pipeline. The broader 2025 IPO market was the strongest since 2021, with traditional IPOs raising $33.6 billion.
Meanwhile, 2026 is expected to be even larger, with hundreds of late-stage private companies (including more than 800 unicorns) now ready to access public markets.
Now, there’s definitely been some “crazy” happening with these IPOs. From PwC’s 2026 outlook:
A pre-revenue AI datacenter infrastructure and power provider priced a sizable offering – raising roughly $700 million at a valuation above $12 billion – and surged more than 55% on its debut, underscoring investor conviction in next-generation infrastructure.
A pre-revenue company. $12 billion valuation. Up 55% on day one.
This is textbook late-stage speculation.
So, our “speculation over substance” category remains firmly Red.
“Easy money and leverage” update: Margin debt hits new all-time high
Back in October, we noted that margin debt had climbed to roughly $1 trillion, near all-time highs comparable to peaks before market corrections. We scored this category Red.
The latest data shows the situation has intensified.
According to FINRA, margin debt hit $1.23 trillion in December 2025 – the seventh consecutive record high and the eighth straight monthly increase. The debt level is up 36.3% compared to one year ago.
But we can take it one step further. When adjusted for inflation, margin debt just reached its highest level in history.
So, let’s put this in context…
Margin debt relative to nominal GDP stood at 3.91% as of November 2025, according to GuruFocus. That’s up from 3.48% in August.
The all-time high was 3.97% in October 2021 – meaning we’re now within just 0.06 percentage points away from that peak.
And given that margin debt climbed even higher in December to its current record of $1.23 trillion, the ratio has likely moved even closer to – or possibly exceeded – that all-time high.
But here’s what should give us pause: The peak during the dot-com bubble in 2000 was just 2.6%, and in 2007, before the Great Recession, it was 2.5%.
We’re substantially above those historical danger zones.
Another way to measure this risk is the “Margin Debt Carry Load” – the dollar amount of margin debt multiplied by the estimated margin rate (major bank prime rate plus 2%), expressed as a percentage of nominal GDP.
By this measure, we’ve now reached levels seen during the last stages of the dot-com bubble in 2000.
From ProActive Capital Management’s recent analysis:
Margin debt is definitely not a timing indicator. This can continue to get higher and higher, just as the stock market can.
What it can do, though, is create violent downturns in the market.
When an investor owns stock on margin and that stock goes down a certain amount, the brokerage forces the investor to sell, which can create an elevator down effect.
Our “easy money and leverage” category remains a clear Red.
“New financial products” update: The single-stock leveraged ETF explosion
Back in October, we highlighted the boom in single-stock leveraged ETFs – funds that let traders take double- or triple-leveraged bets on single stocks like Tesla or Nvidia.
We also mentioned a “weekly pay” ETF that combined leverage with weekly cash distributions (with a significant portion being return of capital, not investment gains).
We scored this category Yellow because while creative packaging was back, it hadn’t yet reached 2021 Special Purpose Acquisition Company (SPAC)-mania levels.
Well, the explosion has continued – and arguably accelerated.
As of September 2025, approximately 25% of all funds launched during the year were leveraged ETFs – roughly 170 out of 660 total launches. The majority of these are single-stock ETFs.
The pace hasn’t slowed.
In December, “Leverage Shares” by Themes ETFs launched six new single-stock leveraged ETFs. Eight more were launched in January.
These products target 200% exposure to the daily performance of individual stocks, with issuers racing to launch leveraged products on newly public companies within days of their IPOs.
Meanwhile, on January 20th, Tuttle Capital Management launched the “Tuttle Capital Meme Stock Income Blast ETF” (ticker: MEMY). It’s an actively managed ETF that combines exposure to 15-30 meme stocks with a systematic put-spread program to harvest option premium from the heightened volatility in retail-driven stocks.
Bottom line: The creative packaging is back in force, the products are increasingly complex, and retail access has been democratized.
So, let’s upgrade our “new financial products” category from Yellow to Red.
“Retail crowding in” and “headline-grabbing deals” updates: still elevated, but not extreme
The retail trading landscape remains active, but it’s nowhere near the peak meme stock frenzy of 2021.
Similarly, headline-grabbing deals continue at a healthy clip with the massive AI IPOs we profiled earlier.
And yes, we’re watching for more circular-logic financing arrangements like the AMD/OpenAI warrant structure we highlighted back in October – where a significant portion of the deal’s funding appears dependent on AMD’s own stock price appreciation.
But we’re not seeing these creative financing schemes proliferate to 2021 SPAC-mania levels yet.
So, both “retail crowding in” and “headline-grabbing deals” remain at Yellow – elevated risk but not yet in the danger zone.
Our updated Crazy Map scorecard
Here’s where we stand as of early February 2026:
- Speculation over substance: Red (unchanged)
- Easy money and leverage: Red (unchanged)
- New financial products: Red (upgraded from Yellow)
- Retail crowding in: Yellow (unchanged)
- Headline-grabbing deals: Yellow (unchanged)
Three of five categories now flash Red, with the remaining two showing elevated risk.
This is unquestionably getting frothier. The late-stage bull market playbook is unfolding as expected.
But – and this is critical – we’re not at a “run for the exits” moment.
Why we’re still dancing (but watching the door)
The reason comes back to what Paul Tudor Jones said: The final 12 months before a top often deliver the biggest gains. And who’s to say we’re even in those 12 months yet?
Plus, data from JPMorgan shows that buying at fresh record highs has historically been good for investors’ wallets. On average, stocks deliver 9.5% returns in the year following a new all-time high.
William O’Neil, who founded Investor’s Business Daily, captured this dynamic perfectly:
It is one of the great paradoxes of the stock market that what seems too high usually goes higher and what seems too low usually goes lower.
So, our strategy remains: Recognize the risk – but stay invested in the strongest corners of the market.
Regular Digest readers have heard me reference this before, but it bears repeating given today’s Crazy Map update:
As long as the music is going, keep dancing – but dance close to the door.
That’s where we are today.
Our Crazy Map shows three categories in the red zone and two more flashing yellow. These are late-stage bull market conditions – no doubt about it.
But late-stage doesn’t mean the party stops tomorrow. And the gains during these final innings can be substantial – potentially life-changing for investors positioned correctly.
So, though watching the Crazy Map closely, we’re staying invested.
We’ll keep tracking this here in the Digest.
Have a good evening,
Jeff Remsburg
P.S. Speaking of watching for market excesses, there’s another pattern worth tracking…
Since last summer, every time Washington has announced an equity stake in a strategic company, shares have jumped: 111%, 194%, even 211% in some cases.
Last week’s USA Rare Earth (USAR) is the latest example. After the Department of Commerce announced it was taking an equity stake, the stock jumped as much as 25% before closing the day about 8% higher.
Our technology expert Luke Lango has been mapping this pattern from the beginning, and he’s just identified the companies he believes are next in line.
It’s all tied to the government’s Genesis Mission – President Trump’s executive order mobilizing private industry to win the AI race against China, with hard deadlines starting February 22nd.
