Posts filed under “Psychology”

Market Sentiment Screams Crash! Or Buy! Or Something…

Today, let us briefly address sentiment what it is, what it means and how to use it in your everyday trading. There is no piece of market data that is more misused, misunderstood or misapplied than sentiment.

The spark for today’s diatribe was a State Street study of cash allocations in investment portfolios. The study found that investors worldwide had as much as 40 percent of their holdings in cash in 2014, up from 31 percent in 2012. In the U.S., cash rose to 36 percent in 2014 from 26 percent in 2012.

This led to lots of news media coverage (see “Fear of Equities Drives More Investors to Cash” and “Investor distrust drives rise in cash holdings”). Huge cash holdings aren’t what we typically think of when discussing investor complacency. The always-savvy Michael Santoli pointed to this as an example of bullish desperation.

I am less convinced. Most of the time, sentiment data contains a lot of noise and not a whole lot of actionable information.

We can break sentiment data into two distinct groups: survey and market. Survey data is what we get when we ask someone a question about related market issues. It has an anecdotal component in which someone describes what they are doing in the markets. Market sentiment is some measure of price based on actual buying and selling. This includes a wide variety of indicators ranging from put/call ratios, percentage of stocks higher than their 200-day moving average, money flow, etc.  Continues here

Category: Psychology, Sentiment, Trading

The Spending Habits of the 0.01%

Attention peasants: The Greubel Forsey GMT at $549,000 Source: Greubel Forsey I have been hearing a lot about the spending habits of the 0.01 percent lately. Perhaps, a little bit too much. Don’t worry, this isn’t going to be a class-warfare rant or a treatise on living the simpler, less materialistic life. Rather, it is…Read More

Category: Consumer Spending, Psychology, Really, really bad calls

MTA Presentation: Risk, Trading & Neurofinance

Click through for the free registration:   MTA New York Chapter Meeting June 23, 2014 Featuring Barry Ritholtz presented by Bloomberg L.P. The New York Chapter of the MTA invites you to our next chapter meeting on Monday, June 23, 2014. We are honored to have Barry Ritholtz, founder and chief investment officer of Ritholtz…Read More

Category: Markets, Psychology

PSYOPS – Wars Are Fought On and Off the Battlefield

Source: Online-Psychology-Degree.com h/t Washington’s Blog

Category: Digital Media, Psychology, War/Defense

Be Wrong Like Ray Dalio

In yesterday’s column, I wrote: If you have an issue with Social Security, then fix it. The regressive taxes to fund retirement benefits top out at about $117,000 in 2014. Why not simply raise that to $250,000 next year and $500,000 during the next 20 years. Congratulations, you just made Social Security solvent for the…Read More

Category: Cognitive Foibles, Corporate Management, Hedge Funds, Psychology

Category: Asset Allocation, Investing, Psychology, Think Tank

June 23: MTA NY Meeting

MTA New York Chapter Meeting June 23, 2014 Featuring Barry Ritholtz presented by Bloomberg L.P. The New York Chapter of the MTA invites you to our next chapter meeting on Monday, June 23, 2014. We are honored to have Barry Ritholtz, founder and chief investment officer of Ritholtz Wealth Management and author of Bailout Nation, present…Read More

Category: Markets, Psychology

What Are The Cult Firms of Today?

@ritholtz I’ve read about other orgs before, and they don’t usually talk about a “search for the truth” and “getting to the other side” — Joseph Weisenthal (@TheStalwart) June 8, 2014     The other day, I got into a Twitter discussion with Joe Weisenthal and others on the hedge fund Bridgewater. A WSJ article had described…Read More

Category: Corporate Management, Philosophy, Psychology

A Bear Market for Mom & Pop Investors

Last year, we noted that there was a “Bubble in Bubble Calling.” News media bubble chatter was the rage, whether it was tech initial public offerings or stocks or bonds — all caused by “a global central bank QE bubble.” Here we are two quarters later, with the central bank reducing quantitative easing by scaling…Read More

Category: Investing, Markets, Psychology, Sentiment

How Much is a Tulip Worth

Category: Psychology, Think Tank, Trading