Posts filed under “Sentiment”

Barron’s Unsentimental Investors

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Our monthly letter to clients was picked up and excerpted by Barron’s Market Watch: A Sampling of Advisory Opinion.

This is the section of the commentary relating to investor sentiment:

Unsentimental Investors
April Insight
by Ritholtz Wealth Management
90 Park Ave., New York, N.Y. 10016

April 2: Anyone who thinks stock market sentiment is excessive today should speak to the American people. According to a Gallup poll in the first quarter, half of all Americans think putting money into the stock market is a bad idea.

In the 1999-2000 era, 67% of Americans thought putting money into the stock market was a great idea. Only 28% thought it was foolish. Fast-forward to today—more Americans think putting money into the stock market is a bad idea (50%) than think it’s a good idea (46%). We might be tempted to call this irrational nonexuberance in light of the performance of the market over the past five years.

When we think of important market tops, we think of widespread euphoria, absurd valuations, and even the dumbest ideas having endless venture-capital dollars thrown at them. There is little euphoria today for the overall market, as this survey makes clear. Valuations are only mildly elevated relative to history. Profitable companies like King Digital Entertainment, the recently public makers of the videogame Candy Crush, have seen their IPOs tank—and this despite the massive amount of revenue their biggest game brings in. Candy Crush is coming up on a billion dollars in revenue.

That’s the sort of metric the Pets.com sock puppet from 1999 could only dream about.

-Barry Ritholtz

 

Always a pleasure to be in Barron’s . . .

 

Category: Apprenticed Investor, Media, Sentiment

Big Data in Finance: Sentiment-extraction from News

Using big data in finance: Example of sentiment-extraction from news articles Nitish Sinha FEDS Notes, March 26, 2014     There is much discussion and research in finance on using “big data” to understand market “sentiment.” In this note, I will draw on some of my own research in behavioral finance–Sinha (2010) and Heston and…Read More

Category: Data Analysis, Federal Reserve, Sentiment

Why Minsky Matters

Click for radio segment.

Source: BBC Radio 4

Category: Cycles, Digital Media, Sentiment, Video

High Flying Tech Stocks Come Back to Earth

Fall from recent highs Source: RWM   Some of the most prominent names in technology are getting shellacked today. These companies got way ahead of themselves and now they are, well, to be polite, let’s just call it “retrenching,” as they give up a large percentage of their gains. I don’t think that Twitter Inc.,…Read More

Category: Sentiment, Technology, Trading

Things I Don’t Care About On This Miserable Monday

It’s a cold and miserable Monday in what was supposed to be spring. Winter was supposed to have ended last week, but it refuses to depart peaceably. I don’t know about you, but I am sick of it. I am going to use the nasty weather as an excuse to vent. What follows is a…Read More

Category: Markets, Sentiment

Sorry Banks, Millennials Hate You

Source: FastCo

Category: Bailouts, Credit, Crony Capitalists, Sentiment

Global Investor Poll

There is a fairly massive interactive graphic over at Bloomberg, covering all sorts of sentiment data:   click for interactive graphic Source: Bloomberg

Category: Digital Media, Sentiment

Nobody Likes Bonds!

Earlier this week, we noted that “the Consensus Hates Bonds.” That is a small part of the reason my firm decided to increase our exposure to specific types of fixed income this year after having been significantly underweight bonds in 2013. I mentioned we added preferreds and corporate fixed income, obtaining that exposure primarily though…Read More

Category: Fixed Income/Interest Rates, Sentiment

Am I Too Bullish?

Over the past few weeks, I have been trying to push back against the usual contingent of bears. In particular, I have argued that this bull cycle is not yet over, markets are not in bubble and that people have been sitting for too long in way too much cash. John Coumarianos of the Institutional…Read More

Category: Apprenticed Investor, Cognitive Foibles, Investing, Sentiment

What Does It Mean When Investors Sit in Lots of Cash?

Consider this interesting divergence: Despite a plethora of bubble talk, chatter about high CAPE valuations, and market tops, investors have been carrying an awful lot of cash. This is not a new phenomenon, but rather, has been a persistent condition since this most hated rally in Wall St history began. Before we proceed with the…Read More

Category: Investing, Psychology, Sentiment