Market Indicators - Investor Sentiment

Top 261. Mar 11, 2000 6:43 AM

» Gene - 3/13/2000 - Investor's Sentiment Readings

Slick - thanks and it looks like you are holding in your arms a couple of cute motivators for your investments!

After filling my head all week with all kinds of investment figures, analysis and such, it just feels good to kick back and free wheel at the keys. Besides when you think of it, with the terrific folks that we have at this site who are very good at the "hard analysis", one must contribute where they can for their food and drink. And after 30 years of dull and boring CYA memos in Corporate America - "Free at last, Free at last, Lord Almighty Free at last"!

What a wild and woolly week in investment land and come on admit it, those of us who are participating in this stock market, all love and revel in it. It is officially Stock Market Talk, all day, all the time with almost everybody in America both at work and at play. We rush home to tally up the portfolio on Yahoo, Excel or where ever we store the little nest egg figures and then head to the chat rooms. We could fill a book with anecdotal examples of "Bearish" signals but the real Bears have been doing that for 3+ years and they have been dead wrong.

There is certainly a myriad of Economic stats, business, political and productivity reasons to explain it all but one thing stands out to this observer - PEACE. Never underestimate the power of Billions of people yearning to better themselves as the underpinnings when they throw off the yoke of totalitarianism. All of that creativity and energy heading in a more postive direction is something to behold. It doen't mean we won't some "speed bumps" along the way, but hey, that is why we stress and talk about Asset Allocation here, so we can worry, fret, chat, adjust and sleep at night. I'll admit to two kinds of whiners that drive me nuts. Those who flee to 100% Risk Free Treasuries and then complain about returns. The others are those who load up with nothing but risk and then see conspiracies when they lose a bundle. The Golden Rule posted in Gene's house in prominent spot "Thou Shall Not Whine".

We barely had time to savor the run to NASDAQ 4,000, then we hit 5,000 and we hardly had time to raise our glass to toast it when EVERYONE is talking about NASDAQ 6,000 or when it will overtake the DOW! Please, can we just take a little time to enjoy it all before being asked to hurl more money at it? Well, this poster is taking some time to savor it as I'm heading off for a 10 day vacation to Arizona for some Wealth Effect related recreating!

To these sociological oriented eyes, sitting in retirement vantage point while gazing at my navel - It is looking as though the Boomers who changed the world in the 1960s and 1970s have joined up with the Gen-Xers and Gen-Yers from the 1970s and 1980s to toss out the Old Economy for the sexy, hip-hop oriented New Economy! They seem to have successfully built the Lake Woebegone World of Investing (NASDAQ) where ALL investors and investments turn out just Woebegone's children - ABOVE AVERAGE! Techno Bulls as far as the eyes see and the only cloud is Old What's His Name, but who is afraid of a toothless Fed Chief?

And don'tcha just love it when a guest, and a very successful one at that, comes on Wall Street Week and declares Value investing to be dead? Seems to these experienced investing eyes, just when folks have figured out what works and declare it to be the future, somebody or something goes up and just takes a hammer to it! Sports dynasties crumble, Oil Cartels break apart, Japanese bubbles burst, Real Estate grows to the sky, then falls....well you get the drift. Be most careful when everyone declares they are a Techno Bull and see no end in sight.

Am I the only one noticing that Uncle Lou on WSW has taken to saying when reporting the Elve's Dow prediction the last few weeks states "The only time in X weeks that is has been negative" without saying that the fired Honeybear Dudack had been right for 4 weeks running? For crying out loud, Where is the justice, where is the balance?...LOL

We also notice that Alan Greenspan's deification may be put on hold according the bad press he has been receivng the last few weeks. When Paul Sarbanes, a liberal Democrat from Maryland starts to complain about his rate hikes and several pro-business Republicans are telling Grrenspan and Summers to butt out of the economy, some interesting times may be ahead for the economy and Federal Chieftain of Money, especially in an election year no less.

But in the meantime, we are eternally grateful for our gains in this market and as BB said,
"Thank the investment Gods for our good fortune" (Gee, Is it okay to mention his name here?)

Well, as we look at the Sentiment Reading this week and see it is still in the mid 60's after all of the recent Friday up and down drafts, so no messgaes there but more of the same!

The Rolling 4 week Sentiment average covers the period from 2/21/2000 thru 3/13/2000.

It is also important to remember that Bob Brinker considers a 70% ratio number to be neutral and is only one of his four main indicators with the other three being Economic, Monetary and Valuation.

From 3/13/00 Barron's Page MW73 :

Investor's Intelligence

Bulls = 53.4% Last Week = 52.2% Two Weeks = 51.8%
Bears = 27.6% Last Week = 28.3% Two Weeks = 28.6%
Corr = 19.0% Last Week = 19.5% Two Weeks = 19.6%

% Bulls/(% Bulls + % Bears)= Sentiment %

53.4%/(53.4% + 27.6%) = 65.93%

Rolling 4 week average = 65.46%

Weekly Bullish Sentiment %:

Week 03/06 = 64.84%
Week 02/28 = 64.42%
Week 02/21 = 66.63%
Week 02/14 = 65.60%
Week 02/07 = 63.78%
Week 01/31 = 68.17%
Week 01/24 = 67.08%
Week 01/17 = 67.37%
Week 01/10 = 64.84%
Week 01/03 = 67.07%
Week 12/27 = 64.41%
Week 12/20 = 64.43%
Week 12/13 = 63.83%
Week 12/06 = 64.87%
Week 11/29 = 64.16%
Week 11/22 = 62.61%
Week 11/15 = 55.29%
Week 11/08 = 52.70%
Week 11/01 = 51.70%

07/20/98 Bulls = 52% Bears 24% for 68.42%
10/12/98 Bulls = 38.5% Bears 42.7% for 47.41%

Gene

-- posted by Gene

Top 262. Mar 11, 2000 8:09 AM

» JenL_2 - Superb Writing Gene!

Happy Arizona Trails!

Enjoy your time in...

Arizona

...but Watch out for the Arizona...

Ursus americanus!

.....Jen

-- posted by JenL_2

Top 263. Mar 11, 2000 9:15 AM

» Rande - Gene,

Gene,

Superb!

-- posted by Rande

Top 264. Mar 11, 2000 6:41 PM

» Slick - Does P/E Matter?

Kirk---that was a good read. I always find articles that connect with the ordinary investor ( like me ) to be written with a noticeable lack of " technical data". Thanks for the link.

Best Regards---Slick

-- posted by Slick

Top 265. Mar 27, 2000 6:55 PM

» _Glen - Sentiment numbers from investorhome

Am I just being a bit over-dense today, or aren't the sentiment numbers being posted on investorhome.com anymore?

-- posted by _Glen

Top 266. Mar 28, 2000 9:51 AM

» Gene - 3/27/2000 - Investor's Sentiment Readings

Rande & Jen, belated thanks for kind words, the awesome cactus graphic and for watching the market while I was gone. I'll have to admit, the break from our daily routine was enjoyable. Don't let anyone kid you, being retired and very active every day while managing one's portfolio is a very tiring job - like I'll get any sympathy votes for that one!

Well, here we are back safe and sound after 2 weeks off renewing our mental, physical, retirement and investment juices in sunny Arizona. Days of hiking on various mountain & desert trails with evenings of great Southwestern / Mexican food and margaritas (on the rocks with salt, the only way) certainly help to renew one's spirits.

Of course, at first it appeared that hardly anything of significance happened here while I was gone but upon closer inspection - Greenspan raises rates and the market goes UP, Rande tries to help someone with a link to his Suite 101 Bio and gets the heave-ho from the BB site. What kind of thanks is that after years of Rande's GREAT help to folks over there and then BB site implodes upon itself much like the Kingdome in Seattle! Talk about Capitalism's Creative Destructive tendencies! Their loss, our gain.

Well, yours truly is watching this sad situation closely for as I have stated previously, Bob helped get me to this happy retirement stage during the 80s and 90s, so it will be very interesting to see it all plays out.

We moved to a Equity weighting floating between 35% to 45% about 12 months due to change my overall retirement status at the age of 57 to more of a capital preservation and risk averse position and was surprised it took Bob so far to follow our lead :>)

With Abby's call for 65% Equity, after 72% a few months ago, then to 70%, so I hope Goldman Sachs doesn't reach suffer the same fate when she bombs out or calls for even lower allocations!

When yours truly tallied up the net-net on his portfolio last Friday, ye old portfolio was up +2% while gone with no monkeying around with it for 3 weeks I hadn't dabbled with it. Let me see, if I take off for a year and don't fiddle with it, at that rate of return it will make for a +34% to +40% return! I guess that is what they mean by tuning out all the "market noise" and one is better off!

Well, as we monitor the Sentiment Reading this week and see it is starting to inch upward toward that "magic 70% ratio". I guess folks really believe that Big Al's rate increases won't hurt, the extra spending for oil & gas doesn't hurt and labor shortages are not real. But then what am I worrying about as probably "this time it is different" since that has been the truth for these last 9 months?

Add to this, the enormous liquidity that is present in this market and the record setting monies pouring into the market should certainly make this March / 1st Quarter "window dressing" very interesting.

Also fascinating is the amount of extra risk we investors appear to be taking according to all the reports. Even yours truly admits that when he went to the lower Equity allocation, he overweighted his Small Cap and Technology holdings last year. Of course after seeing the recent Nadaq drop of -10% and then for instance, his Van Wagoner Micro Cap dropping -22% in 3 days, we found it wasn't particularly pleasing and it brought home some of the risk inherent in these funds. But after the subsequent bounce back and a bit of broadening out in the financial stocks, we are back to feeling chipper and planning our next vacation as well as some home improvement projects!

The Rolling 4 week Sentiment average covers the period from 3/6/2000 thru 3/27/2000.

It is also important to remember that Bob Brinker considers a 70% ratio number to be neutral and is only one of his four main indicators with the other three being Economic, Monetary and Valuation.

From 3/27/00 Barron's Page MW77 :

Investor's Intelligence

Bulls = 55.7% Last Week = 52.3% Two Weeks = 53.4%
Bears = 26.4% Last Week = 29.0% Two Weeks = 27.6%
Corr = 17.9% Last Week = 18.7% Two Weeks = 19.0%

% Bulls/(% Bulls + % Bears)= Sentiment %

55.7%/(55.7% + 26.4%) = 67.84%

Rolling 4 week average = 65.74%

Weekly Bullish Sentiment %:

Week 03/20 = 64.33%
Week 03/13 = 65.93%
Week 03/06 = 64.84%
Week 02/28 = 64.42%
Week 02/21 = 66.63%
Week 02/14 = 65.60%
Week 02/07 = 63.78%
Week 01/31 = 68.17%
Week 01/24 = 67.08%
Week 01/17 = 67.37%
Week 01/10 = 64.84%
Week 01/03 = 67.07%
Week 12/27 = 64.41%
Week 12/20 = 64.43%
Week 12/13 = 63.83%
Week 12/06 = 64.87%
Week 11/29 = 64.16%
Week 11/22 = 62.61%
Week 11/15 = 55.29%
Week 11/08 = 52.70%
Week 11/01 = 51.70%

07/20/98 Bulls = 52% Bears 24% for 68.42%
10/12/98 Bulls = 38.5% Bears 42.7% for 47.41%

Gene

-- posted by Gene

Top 267. Mar 28, 2000 10:32 AM

» Gene - Kirk

Kirk, meant to mention about your Bear picture and advice - we saw lots of what I assumed to be Black Bear scat (leaves in chat venacular!) on the mountain trails there. Maybe a sign of something I could have worked work into this week's posting!

Gene

-- posted by Gene

Top 268. Mar 28, 2000 11:16 AM

» Rande - Gene,

Gene,

Thanks for the good word. Excellent analysis as usual. One thing I'm finding hard to reconcile, and I guess it's why BB uses a number of other sentiment indicators in addition to the Investor's Interlligence survey (which is, after all, just a bunch of newsletter writers -- sorry, Kirk) is that Nasdaq short interest continues at record high levels. Conflicting big picture, but then what's new?

Great to hear you had a good break and a wonderful time. What it's all about.

-- posted by Rande

Top 269. Apr 3, 2000 6:18 AM

» Gene - 4/03/2000 - Investor's Sentiment Readings

Sure looks like springtime hereabouts - the crocuses and daffodils are a popping after a long sleep, Baseball's opening day this week and the Indices 1st quarter's incredible rides and last week's Window dressing finished. And to say there was quite a bit of Window dressing last week would be the understatement of the year. But hey, who are we to complain since several of the financial stocks we own were gapped up about +15% to +20% so we certainly feel there are some real smart & savvy fund managers out there - IMHO! And of course we keep telling ourselves that "volatility is our friend" when we have our buy list all made up and tracking the stocks we may wish to purchase. Lots of nice solid companies in the "value realm" on our list, such as Financials and Drugs and it appears that the investors also think so today.

We freely admit to being curious to see as to how the 2nd quarter can possibly top the 1st quarter for excitement, for instance - NASDAQ had 3 (!) corrections of 10 %, the "Old Economy (a.k.a. Staid)" Dow makes like a roller coaster for its swings to 11,700 back to 9,800 to 11,200, then we watched Big Al Greenie Meanie test the limits of the English language in trying to explain how he IS NOT targetting the stock market with his rate increases and lastly Bob Brinker "finally" sends to his subscribers, the long awaited but never before seen "partial sell" signal that arrived in mailboxes 1/10/00. But today's beginng on the NASDAQ, SURE does look like a reasonable start to a interesting quarter!

Several must reads in todays WSJ, Money and Investing section, page C1:

After a Wild Quarter, Future is Just a Guess
Investors Ask: Is It Time For Value Funds?
Loyalty Leads to Loss in P&G Profit Sharing

Also a BIG SECOND vote for Rande's recommendation to check out 4/2/2000 Business Week's issue on Wall Street > "The Hype Machine", well worth the read. Needless to say, I'm keeping it with a bunch of anecdotes in a file I have been saving labelled "How I knew it was a Bubble"! Right up there with the WSJ article (front page no less!) from a several weeks ago on the barber who gave stock tips which was only one week after our local paper had a story on the cab driver who EVERYBODY wanted to ride with who gave stock tips! Of course a number of folks have been documenting this sort of stuff for several years but I want to be ready with some real savvy "I told you so, articles" when it actually happens! :>)

Wow - Keep your seat belts fastened, looks like we will have some fun rides this quarter, at least as to the way the NASDAQ is starting off today! Although it could just as easy switch by the end of day as we are all aware.

The Rolling 4 week Sentiment average covers the period from 3/13/2000 thru 4/03/2000.

It is also important to remember that Bob Brinker considers a 70% ratio number to be neutral and is only one of his four main indicators with the other three being Economic, Monetary and Valuation.

From 4/03/00 Barron's Page MW77 :

Investor's Intelligence

Bulls = 54.1% Last Week = 55.7% Two Weeks = 52.3%
Bears = 29.4% Last Week = 26.4% Two Weeks = 29.0%
Corr = 16.5% Last Week = 17.9% Two Weeks = 18.7%

% Bulls/(% Bulls + % Bears)= Sentiment %

54.1%/(54.1% + 29.4%) = 64.79%

Rolling 4 week average = 65.72%

Weekly Bullish Sentiment %:

Week 03/27 = 67.84%
Week 03/20 = 64.33%
Week 03/13 = 65.93%
Week 03/06 = 64.84%
Week 02/28 = 64.42%
Week 02/21 = 66.63%
Week 02/14 = 65.60%
Week 02/07 = 63.78%
Week 01/31 = 68.17%
Week 01/24 = 67.08%
Week 01/17 = 67.37%
Week 01/10 = 64.84%
Week 01/03 = 67.07%
Week 12/27 = 64.41%
Week 12/20 = 64.43%
Week 12/13 = 63.83%
Week 12/06 = 64.87%
Week 11/29 = 64.16%
Week 11/22 = 62.61%
Week 11/15 = 55.29%
Week 11/08 = 52.70%
Week 11/01 = 51.70%

07/20/98 Bulls = 52% Bears 24% for 68.42%
10/12/98 Bulls = 38.5% Bears 42.7% for 47.41%

Gene

-- posted by Gene