Fear of Missing A Rally

A friend who is a fund manager asked me the following question today: What’s the greater fear, missing a rally, or owning equities that go down?

Today’s rip-roarin expiration day market rally might help answer that question. The fear of missing the rally certainly appears to be the much greater sin — at least to most professional managers today.

Now consider this interesting variation (This one should definitely get the attention of trend followers).

John Roque — the very smart technical analyst for Natixis Bleichroeder — John relates how he continues to hear on CNBC and from clients that “financials are  cheap…we’re doing selective buying.” Or, “We’re buying financials down here. They’ve been destroyed.” Or, “The financials are raising capital and getting the deals done. The worst is over. We’re buying some good ones.”

Now, compare that attitude with  typical investor interest/sentiment about oil, food commodities, or natural resource stocks. Extended! Overbought! Driven by speculation!

So if you are looking for a true contrary trade, which do you choose:

- The one in a long-term uptrend with no sign of any technical weakness, widely disbelieved the whole way up?

- Or, do you go for the relentlessly beat up, long term down trend — the one if you are buying here,
you are merely guessing the worst is over.

Thanks to John Roque of Natixis Bleichroeder, here’s the relative Market Cap of S&P Energy versus S&P Financials:


courtesy of Natixis Bleichroeder

Category: Commodities, Credit, Energy, Finance, Markets, Trading

Aggregating the Aggregators

Over the past few weeks, I have featured several economics/market web aggregators. They all tend to have a focus on business, though many come from overall aggregators that have tabs for  different topics.

Since I like to recursively get all meta on you, here’s my aggregation of all a few dozen blog aggregators, primarily in the Business, Tech and Video space:

(Let me know in the comments which ones I missed, if any . . .)

click on any of these to be taken to their site
Abnormal Returns






the DailyTube

Digg Business/Finance

Economics Roundtable




Read More

Category: Web/Tech, Weblogs

Google’s Black Box

Category: Earnings, Web/Tech

Disappearing Economic Indicators

Category: Data Analysis, Employment, Psychology, Taxes and Policy, Wages & Income

Soros Says Commodity ‘Bubble’ Still in ‘Growth Phase’

Category: Commodities, Psychology

Big Picture Upgrade & Redesign

Category: Weblogs

U.S. Dollar Euro Position

Category: Currency, Trading

Angry Renter Dot Com

Category: Psychology, Real Estate

Word of the Day: homedebtor

Category: Credit, Real Estate

Pre-Revision CPI: 9%

Category: Commodities, Data Analysis, Energy, Inflation