In Sore Winners, Barron's Alan Abelson answers the question with one word- Very:
What strikes us about the current investment scene is how defensive, even delusional, the raging bulls are. And despite rolling in the long green by grace of the big market year, what a bunch of sore winners they are, insistent that everyone else is bearish and only they, brave souls, have the courage to be optimistic.
What hokum! For the fact is everyone's bearish except the mutual funds (whose motto is "cash is trash") and the hedge funds and the private equity funds, traders of every stripe including the racy types who trade futures and options (the Market Vane and Consensus Index surveys: both 70% or higher bullish), Joe Doaks and Jane Q. Public, investment advisers (Investors Intelligence: 56.5% bulls, 19.6% bears) and brokerage house strategists (for whom "sell" is a four-letter word). Did we leave out anyone?-oh yes, and the occasional tourist from Mars.
If everybody's so darn bearish, pray tell, who has been buying stocks like there's no tomorrow the past couple of months? Or are they a new breed of masochistic bears that gets their kicks from buying stocks because they just know the market is doomed to tank?
All of which gives us a strong sensation of déjà vu and, more particularly, why this glorious new year of 2007 seems so much like the not-so-glorious year of 2000. As we remember, 2000 began amid enormous euphoria, with the stock market headed for the moon. While the rationalizations at the time from the good-cheer incorrigibles of why the market was neither pricey or risky differed from the current versions of why the market is, if anything, undervalued, the reasoning is as flawed now as it was then.
As we also remember, 2000 ended in tears and tears that kept flowing for a long couple of years. So keep a generous store of hankies at the ready and hope the denouement to the current manic mood doesn't do quite as much damage to your psyches, let alone your pocketbooks. We were about to say, Happy New Year!, but maybe we'll wait for a more propitious juxtaposition to do so."
That first paragraph is a keeper . . . Say what you might about Abelson -- the man can sure write.