Only Barron’s semiannual Big Money poll of professional investors also is setting a record — for bullishness, that is. In our latest survey, 74% of money managers identify themselves as bullish or very bullish about the prospects for U.S. stocks — an all-time high for Big Money, going back more than 20 years. What’s more, about a third of managers expect the Dow Jones industrials to scale the 16,000 level by the middle of next year, notwithstanding a dismal week of selling that left the blue-chip index at 14,547.51 on Friday.
This spring’s survey is notable, as well, for the dearth of bears: A mere 7% of respondents are pessimists today, down from 27% last fall.
A contrasting view:
A few reminders…
“Still Bullish! (Dow 13000)” – Barron’s Magazine Big Money Poll, May 1, 2000
The May 2000 Big Money Poll was published with the Dow Jones Industrial Average at 10733.91. The Dow had already peaked nearly a thousand points higher in January of 2000, and would go on to lose about 40% of its value in the 2000-2002 bear market, with the S&P 500 and Nasdaq faring far worse.
“Dow 14000?” – Barron’s Magazine Big Money Poll, May 2, 2007
Notable item over the weekend – a European bailout deal for banks in Cyprus now includes a haircut provision. But not for bank bondholders. Of course not for bank bondholders. No – it provides for a haircut on depositors that is being called a “stability levy” amounting to 9.9% on deposits over 100,000 euros, and 6.75% below that level, exchanging their deposits for shares of stock in those teetering banks. So insured bank deposits are now effectively subordinate to uninsured European bank debt. It will be interesting to see how that works out. Alan Greenspan suggested on Friday that there has been a “removal of tail risk” from the global financial system. I doubt it, but we’ll take the data as it arrives. (www.hussmanfunds.com)
A sobering view of future equity returns based on current market conditions. Dr. Hussman has been defensive since 2007.
Before you dismiss his article, understand what he says about the current market valuation and forecasted earnings vs. normalized earnings. I am not a market maven but I don’t find many cheap stocks except for mining companies in the precious metals sector.
Doesn’t feel like that now does it? My self inflicted advice is to look from the bottom-up, but do not become complacent. I am not calling a top, just realize that risks rise when fear declines. Maintain your standards.
The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.
ResultsWeek ending 1/23/2013 Data represents what direction members feel the stock market will be in the next 6 months.
Note: Numbers may not add up to 100% because of rounding.
Change from last week:Bullish: +8.4