Posts filed under “Psychology”

How Bullish is the Investing Public?

We previously mentioned how Bullish the Pros were; What about the investing public — how Bullish are they?

At least when measurd by a particular sub group — over 5,000 online WSJ readers — the answer is "Very" :

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click for larger graphic
Dj_poll_year_end
via WSJ

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While I see a lot of anecdotal chatter about this, and prefer to stick with more quantitative data. Too many people say “All my colleagues/friends/brother-in-laws are _____. That’s meaningless.

The Business Week survey reveals one group of bullishness (Strategists). When I made my guess, I never figured I would be the outlier to the downside. Without thinking much about it, I assumed I would be in the bottom third, or even quartile.

Silly me.

Other surveys reveal a similar Bullish bend. The WSJ poll (over 3,750 people) show 46% expect the same thing as the market gurus: between 11-12k. Another 12% think we end up at more that 12,000. About 22% expect to end 2006 unchanged. Only 9% think we will see the Dow between 10,000-10,500 – a mild correction of less than 10%. A little more than one in 10 persons (11%) think the Dow will drop below 10,000.

The one anecdote I will mention is television bookings:  Why is it I see the same few Bears on CNBC? The bookers I speak with tell me there are far fewer Bulls than Bears.

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Bottom line: Both the pros and the amateurs are moderately Bullish.

 

Category: Psychology

Death of Volatility

Category: Markets, Psychology, Technical Analysis, Trading

P/E vs S&P 500 (50 Years)

As promised, today brings us to the 4th in our series of charts: P/E vs S&P500 click for larger chart courtesy of Mike Panzner, Rabo Securities > I’ll get into the significance of what this means to the markets later, but for now, note where the P/E is over the median, and its impact on…Read More

Category: Earnings, Markets, Psychology, Technical Analysis

100 Year Dow Jones Industrials Chart

Have a look at this 100 year (actually, 105-Year) chart. I colored each “Market” appropriately — Green for Bull, and Red for Bear — to more clearly show what happens. Bull markets get ahead of themselves. At their ends, they tend towards excesses that take a very long while to recover from. When a long…Read More

Category: Markets, Psychology, Technical Analysis

How Blind Are We to Our Own Shortcomings?

Category: Apprenticed Investor, Psychology

Stuff Doesn’t Make You Happy . . .

Category: Psychology

1994 Parallel?

Category: Psychology

Category: Economy, Psychology

If a Bear Watches CNBC in the Woods . . .

Category: Psychology, Television

Be Careful with the Contrary Indicators

Category: Investing, Markets, Psychology