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Post Traumatic Crash Disorder

Posted By Barry Ritholtz On December 12, 2012 @ 11:30 am In Investing,Psychology | Comments Disabled

[1]
Source: WSJ [2]

 

Post Traumatic Crash Disorder (PTCD™ a registered trademark of TBP) seems to be a genuine condition. As the chart above (and accompanying article [2]) reveal, it is the intriguing result of the most recent crashes.

We know “generals always fight the last war,” and it is apparently true about about investors as well. Here is the WSJ:

“After two stock collapses in one decade—2000-2002 and 2007-2009—along with scandals, the rise of high-frequency trading and worries over Washington’s ability to rein in debt, Americans are pulling out of the market. Individual investors yanked a net $900 billion from U.S. equity funds since January 2000, according to fund flow tracker EPFR Global. Stocks and stock mutual funds now make up 37.9% of the average U.S. household’s financial assets, down from 50.5% during the height of the tech-stock boom in 2000, according to the U.S. Federal Reserve.”

That may be the single most bullish thing I have read this year . . .


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URL to article: http://www.ritholtz.com/blog/2012/12/post-traumatic-crash-disorder/

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[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2012/12/NA-BU007_SCREAM_G_20121211074509.jpg

[2] WSJ: http://online.wsj.com/article/SB10001424127887324020804578147572199188766.html

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