Posts filed under “Contrary Indicators”

Japan versus Gold?

Charts like this make me want to Sell Japan and Buy Gold — at least for a quarter or so.

 

click for larger chart
scoreboard
Source: Josh Brown

Category: Contrary Indicators, Technical Analysis, Trading

Polling the Public About Investing Is Loads of Fun!

Back in August of 2011, Gallup decided to do what they do best — which is poll the American public for their thoughts. In this instance, it was their thoughts on investing. The questions asked was simply: What do you think is the best long term investment? Their answers were very instructive: 34% of Americans said…Read More

Category: Cognitive Foibles, Contrary Indicators, Investing, Really, really bad calls

The Smartest Man in Europe

I have been reading this (for lack of a better word) series from Byron Wien for many years. I remain unsure if The Smartest Man in Europe actually exists or if it is a clever ruse that allows Wien to say things at arm’s length that perhaps he would not be able to if he…Read More

Category: Contrary Indicators, Investing

World’s Biggest ETF/Contrarian Indicator: GLD > SPY

GLD was briefly the world’s biggest exchange-traded fund. In August 2011, GLD had assets of more than $77 billion, surpassing SPY (SPDR S&P 500 ETF) for a short time. The SPDR Gold Trust’s market capitalization rose to $76.7 billion  — gold briefly topped $1,880/ounce. At the same time, SPY’s “capitalization” was ~$74.4 billion. I missed…Read More

Category: Contrary Indicators, ETFs, Gold & Precious Metals, Technical Analysis

World's Biggest ETF/Contrarian Indicator: GLD > SPY

GLD was briefly the world’s biggest exchange-traded fund. In August 2011, GLD had assets of more than $77 billion, surpassing SPY (SPDR S&P 500 ETF) for a short time. The SPDR Gold Trust’s market capitalization rose to $76.7 billion  — gold briefly topped $1,880/ounce. At the same time, SPY’s “capitalization” was ~$74.4 billion. I missed…Read More

Category: Contrary Indicators, ETFs, Gold & Precious Metals, Technical Analysis

Putting Investor Bearish Sentiment into Context

Individual Investors Are Not Buying It Click to enlarge   Lots of people have been discussing how negative investor sentiment is, showing the chart above. It shows markets making new all time highs as expectations that markets will be higher six months hence is at a mere 19% of AAII respondents. (See Individual Investors Are An…Read More

Category: Contrary Indicators, Investing, Quantitative, Sentiment

Sell Side Consensus Indicator Still Extremely Bearish

Click to enlarge Source Merrill Lynch     I’ve shown this chart several times over the past year, but its worth repeating: The Street remains very bearish by historical standards. Note this is not at all a short term indicator; and does operate with a bit of a lag.     Previously: Strategists Most Bearish…Read More

Category: Contrary Indicators, Sentiment

Rug to be pulled out from under the short bonds trade ?

In certain aggressive managed accounts, we have been nibbling on some TBT, the inverse 20 year treasury ETF. Data such as the AAII Asset Allocation Survey show investors are very overweight bonds relative to their 27 year mean.  Additionally, the multi-decade drop in interest rates suggests we are likely at a secular low, and ready to…Read More

Category: Contrary Indicators, Fixed Income/Interest Rates, Think Tank

How Cheap Are Equities ?


Source: Société Générale

 

 

To answer that question, look at the chart above, courtesy of Société Générale’s Albert Edwards, who asks the question “Are equities really “unambiguously cheap”?“. (Cyclical Earnings charts after the jump).

Shiller’s CAPE chart shows that while US equities are fairly reasonably priced, they are not, to use Edwards term, ““unambiguously cheap”.” But for about a week in March of 2009, they were, but if you blinked you may have missed it.

Europe, on the other hand, appears to be appreciably cheaper than US equities. (Funny how recessions tend to do that). We have about a 16% European weighting, primarily through ETFs like GAL and DVYE.

Regardless, contrarians may wish to take note of this from a valuation perspective.

 

 

Source:
Are equities really “unambiguously cheap”?
Albert Edwards, Global Strategy Weekly
Société Générale, February 14, 2013

 

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Category: Contrary Indicators, Earnings, Investing, Valuation

Economists: Don’t Buy Bonds (so you should buy bonds)

click for larger table Source: Bianco Research   Fancy yourself a contrarian? The crowd hates bonds. How about you . . .  ?   ~~~~   UPDATE February 6, 2013 8:11pm I am not suggesting backing up the truck with 10 years, I was trying to make a snarky point about crowd opinion.  I guess…Read More

Category: Contrary Indicators, Fixed Income/Interest Rates