On November 22, 1986, a 20-year-old Mike Tyson beat Trevor Berbick by TKO in the second round for his first world championship heavyweight belt. It was his 28^th professional bout.

I bring this up because even though Tyson was destined for greatness, there was a time to go for the belt.  If he had gone for it in his 18^th fight, maybe he would have lost.

Even the greatest stocks can see their share price get too far in front of development. That sets them up for failure, and to be on the other end of the TKO.

For instance, we know cybersecurity has a bright future, and one of the key players is Palo Alto Networks (PANW).  Well, the company posted its financial results last night, and the shares are getting the stuffing knocked out of them (opened down 26%). At some point, Palo Alto will stop going down and resume its march higher.

But, it is a reminder of why hysteria and an abundance of enthusiasm is often associated with imminent failure on Wall Street.

That is the case right now for investors, including hedge funds, which have seen their momentum exposure reach a zenith.  This measures overweight leaders minus the weight in the laggards.

The thing is this has worked big time. But, in so many ways, it feels like maybe Mike Tyson walking into the ring for his first title at 18 or 17 years old.  He could win, just like S&P 500 versus S&P 500 equal weight continued to rally higher in 2008.  Or he could have failed like the same rally in 2020.

It feels like we are set for such a moment of truth when Nvidia (NVDA) reports its financial results after the closing bell.

Goldman calls NVDA the most important stock on earth.

And Bank of America keeps reminding investors of past bubbles.

It is too soon to worry about a monumental stock market crash, but when stocks are this elevated, the chances of 20 to 40% swoons in individual names are real.