Thursday, February 9, 2012

Pragcap on AAII

Ooh! Ooh! "Bullish Sentiment Surges"!

And I quote:

"Bullish sentiment is now above its historical average of 39% for eight out of the past nine weeks."


"Bullish sentiment is now more than one standard deviation above its historical average, placing it above the typical range that has been registered over the course of the survey."

So? What do you say to that? Hint: if you're one of them contrarian bloggers who likes talking about dumb money being wrong all the time, then you'd best put your money where your mouth is and go short. Or at least speak up.


  1. If i cared enough about what the dumbass end of the market were thinking and also wanted to tell you to stfu, i'd point to times when the bullish whatnot indicator thingies stayed one degree of statistical devialahlah over the norm for 8 or 9 months, not weeks. Point me at 2 degrees or 4 degrees of separation and it's a no-brainer contrary call (perhaps). So far, it's a relatively overbot mkt that can stay that way for a while longer.

    Though yes, true that via a couple of decent sales (one a trade that worked well, one a missed bullet that somehow made a small profit) i've been raising a bit of cash here (for a jolly whizzo what-ho! begad change) and not in a hurry to put it back in. Knowing me i'll wait until the very very tippy top top to give in to the temptation of doing that.

    As for the sheeple, xkcd summed it up well

  2. This may surprise you, but I don't have an opinion either way. If I cared about "the market" I'd have ignored mining shares and bought AAPL, or even my own company (up 40% since the fall), and made more money than any mining investor has this past few months I reckon.

    And yeah I've known for a long time that the market can go very bullish for longer than you can stay short.

    This post was just to illustrate that the bears/bulls indicator is indeed pretty useless. Yet it's always trotted out and I'm kinda tired of it.

    Though maybe it's a good idea to look at what the market breadth is saying, if you want to really figure out if we're topped out.

    I personally think the miners are topped out and rolling over, but that it'll be a minor correction. Or, at least, the easy money was already made.