Trop évident?

‘Thought I’d try to strike a more cosmopolitan tone with a little French, courtesy of Babel Fish. Oh, by the way, it means “too obvious.”

Here’s my present view of the [investment] world:

  • Lots of optimism around stocks and the economy out there.  Stocks:  from the Investors Intelligence survey of investment advisors (fewest bears since October aaii2007 high) to the ratio of funds invested in Rydex’s bull and bear funds, optimistism abounds.  Here’s a look at the usual lemmings, the participants in the American Association of Individual Investors.  As usual, their enthusiasm is directly correlated with stocks’ movement, not recognizing that risk increases as prices increase.
  • Insiders are very bearish.  Click here for more.
  • The calendar is not friendly for the next couple months.  See the highcycle-composite-highlightlight from the 2009 composite graph shown to the right.  The tendency for September and October to be nasty months seems to happen more often than chance would suggest.
  • The intermediate term backdrop of earnings and the economy has largely only changed from bad to not-so-bad.  To be fair, there have been a handful of indicators that are out-and-out good.  For example, the Leading Economic Indicators justed posted the fourth straight month of positive readings, which is, as Friday’s dispatch pointed out, the first such time since December 2004; also, some of the regional economic surveys have been posting postives, such as today’s Philly Fed, which came out as +4.2%, which was the highest reading–and heading the right direction–since November 2007, when it was heading the wrong direction.

Here, though, is a critical question:  is there any well-informed investor with no particular style axe to grind (e.g. long-only) or investment mandate (e.g. fully invested at all times) who is not aware of all these.  Does that create a well-informed group of lemmings whose fingers are poised too close to the sell button?  Only time will tell, but these big signposts seem to at least command respect, if not action.

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2 Responses to “Trop évident?”

  1. dave says:

    Don’t think all this volume on dogs & cats like C, AIG, FRE, SIRI is a good thing.

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