A former mob boss of the Colombo crime family in New York reported to CNBC that he doesn’t trust Wall Street, and the stock market that goes with it.  Michael Fanzese, who was in prison for 10 years, is now discussing the issue of trust.

Franzese said, “I did a lot of things at times with people on Wall Street…a lot of guys are shady and they did shady things with me and I don’t trust them.  And I don’t like other people that I don’t know really well taking care of my money.”

Perhaps we should not be surprised that a former mob boss is highly skeptical of other people.  But it also doesn’t mean that he’s wrong.

Franzese believes there is a stock market bubble that is ready to burst and recommends that investors diversify.  He even recommends investing in physical gold.  In regards to gold bullion, he said, “No matter what, it’s always going to have a value and there will always be something there.”

I never thought I would tell this to others, but they would probably be better off taking financial advice from this former mob boss than most of the pundits in the mainstream media.

I don’t trust the people on Wall Street, but it doesn’t mean I think they are inherently evil.  Just as you shouldn’t ask a barber if you need a haircut, or a divorce lawyer if you should get a divorce, I don’t think you should necessarily ask an investment advisor on Wall Street if you should buy stocks.

This is how Wall Street brokers make their money.  They need other investors to buy and sell.  Most people working on Wall Street are generally going to be bullish on stocks.  This isn’t always the case, but it is a general trend.

It is especially refreshing that I have actually heard some people on CNBC (besides Franzese) and others in the financial media outside of the internet who have warned about stocks.  Some just warn that there could be a pullback, but there are a few people out there who are warning there might be a big bust.

I have heard that this current run in the stock market can’t be a bubble because there are too many people warning that it is a bubble.  But there are still a lot of bulls out there, on CNBC and elsewhere.  And you can still have a bubble that is about to burst, even if some people are warning about it.

There were people warning about a tech crash in 1999 and there were people warning about a housing crash in 2005.  It was a small number of people, but they did exist.

It is not surprising that more people today are cautious about what is going on.  We are not very far removed from the last stock market bubble that burst, less than 6 years ago.

I also find that more people are becoming aware of the actions of the Federal Reserve.  They understand that the Fed has had a very loose monetary policy over the past 6 years and the record-high stock prices are a result of this.  With the Fed now “tapering” its monetary inflation, what will support stocks?  The Fed gave us the big stock market rally and now the Fed will take it away.

The one thing about a bubble is that they can often last far longer than seemingly possible.  So while I concur with the tips of Franzese, his mistake may end up being that he is too early.

There were people calling for a tech bubble to burst in 1997.  There were people calling for a housing bubble collapse in 2004.

But even if he is too early, it is better to be too early than too late.  I would take the advice of this former mob boss over the perma-bulls on CNBC any day.