Thread: Investor Sentiment

tsptalk wrote:

7/22/04

The new AAII Investor Sentiment Survey numbers came out today.

Tom, where can I look at this Survey? Is this something you subscribe to for a fee?

I get it at decisionpoint.com, which is a pay site. You can probably get it at AAII.com also but I believe that is a pay site also.

If the losses / stagnation continue, I'd think the bear sentiment will climb dramatically.

Keep an eye on the F fund - if there's some sort of mass exodus to that fund (Bearish behavior), I'd expect its share price to climb accordingly.

I thought the Democratic Convention concluded on July 26th but it actually starts then and ends on July 29. Maybe stepping aside until Friday July 30 or Monday August 2nd is something to consider. That will obviously have to wait for Monday morning to decide.

Something has to get that sentiment down... those stubborn bulls. o

Here is an interesting article:

http://biz.yahoo.com/rb/040720/colum...ks_week_2.html

According to this, it appears most investors are simply "waiting for something to happen". And yes, "geopolitical uncertainty" was mentioned as well. Looks like we could be adrift for awhile - in spite of the fact that a number of companies reported solid earnings (this failed to generate much investor interest in the overall market).

Mike wrote:

And yes, "geopolitical uncertainty" was mentioned as well.

Why aren't we desensitised to that yet? sheesh.

Charles Schwab's Greg Forsythe said that another reason for the market's slowdown is that the so-called 'momentum investors' are staying away.

baha, except this one! :dah: <-- Moi



Frizz --> :dude:

Ok i cant hold off this comment any longer. The bullish/bearish indicator overa very long period of time tends to be a mildly contrarian signal. That being said.... on the shorter term, its very borderline useless IMHO. Why do I say that? My personal experience with my dad which is as follows:

The bulls vastly outnumbered the bears all through the 90s on a day to day basis, and you know what? They were right almost every single day. I remember having to listen to my dad (who owned some common stocks at the time, but was heavy in cash) every day in the 90s about how overbought the market was, how it was going to crash, and howall the greedy bullswas a "negative" indicator. Well, you know what? I watch him "not" make money for a decade for that reason. Oh well sure, he was right by 2000. But i'd still take stocks over bonds in the 90s, heavy positive bulls indicator aside.

Where the indicator might be useful is where greed is obviously rampant as one really could say was the case in late 99, with a glance at the nasdaq chart spike upwards. That being said, the nasdaq is WAY off its all-time high now, so there's no way this exception would be applicable now or anytime soon.

Azanon

There is no tell all, be all indicator but I believe investor sentiment is one of the mostpowerful psychological indicators, or any type of indicator, available. Even in the 90's when we had a strong bull market there were periods of fairly stong pullbacks. The fall of 1998 comes to mind. So a buy and hold strategy would have worked very well but you could make better trades if you are timimg the market with this indicator.

I won't write a long explaination why I believe this to be true because I'm guessing youhave formed you own opinion already,but I will say for anyone else reading this that during bull markets, a high bearish percent reading is a great indicator that the bottom is near and during bear markets, a high bullish reading is a sign of a top.Since right now the 3 legs of a bull market I talk about are looking quite strong (psychology is a bit weak because of sentiment)I believe once the sentiment indicator gets to a level where there are more bears than bulls (or close to it), we will be looking at the bottom.

azanon wrote:

Ok i cant hold off this comment any longer.

heheya...I wondered what that burbling sound was.

The bullish/bearish indicator overa very long period of time tends to be a mildly contrarian signal.

Its not my mind made up so much as just a general sentiment in the investor world. My understanding is that it is a mild contrarian signal, not a be-all, end-all trigger to base a timing decision on. I'm sure i could come up with some links to support that if needed. Still, I dont see how that should even benecessary given the rampant bullish attitude that pervaded in the 90s, and the performance that accompanied that attitude. To be honest, i canunderstand how mathematically it could be contrarian at all since when people want more of a stock, the price reacts by going up, not down.

Regarding your comment about pullbacks in the 90s, 1998, whenever, and being able to take advantage of those, my comment to that is that its also relatively accepted that timers generally lose in bull markets. Only a really, really adept timer (or just plain lucky person) could have beaten a buy-and-holder from 1990-1999. The timer's only real chance to beat the buy-and-holder would have been to predict and act upon the overbought condition at the turn of the century. However, if this site's any example, these timers would have just bought it back a week or two later (judging by the frequency of trades here).

I think it only fair to point out the converse;Timers tend to do well in bear markets cause (obviously) they're not always in the market 100% of the time during a downward trend.

azanon wrote:

I think it only fair to point out the converse;Timers tend to do well in bear markets cause (obviously) they're not always in the market 100% of the time during a downward trend.

Oh yeah of little faith. I actually prefer up and down markets like we are having this year. And, since Joel pointed out some inverse funds to the market, I love it even more! :^