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Soaring optimism from investment newsletter writers means losses ahead for stocks, writes Jason...

Soaring optimism from investment newsletter writers means losses ahead for stocks, writes Jason Goepfert. Going back to 2000, there have been 9 other times when sentiment rose to these levels, he says, and in each of those cases the S&P was lower a month later, with the median loss 3.1%. In 8 out of 9 cases, the S&P was lower 6 months later, with the median loss 4.25%.
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Comments (3)
  • willisg
    , contributor
    Comment (1) | Send Message
    Does anybody know the correlation among sentiment sources: newsletters. pro investors, individual investors?
    8 Feb 2013, 11:12 AM Reply Like
  • Ray - Kitchener
    , contributor
    Comments (74) | Send Message
    Pros and Insiders are selling, and retail are buying. Classic case of Pump & Dump. Every time the market starts to slide, Uncle Ben gets his banking cronies to buy. When everyone is greedy (newsletters), time to be fearful. For the record, I am long Oil (since Dec), just bought Gold miners, and bought the VIX as a hedge. As soon as the last Joe steps off the platform, we should see a move lower, until the printing presses start again.
    8 Feb 2013, 11:40 AM Reply Like
  • Anonymous 2
    , contributor
    Comments (369) | Send Message
    In terms of Optimism Level Measurements from investment news letters, what were month/year equity market benchmark levels at during which the sentiment registered their lowest levels? and,of course, what their levels one, 3, 6 and 12 months later.
    A spreadsheet showing such might be of interest if it also includes
    some of the ETFs representing various Equity sectors.
    Obviously, insider buy/selling levels should be in this spreadsheet.
    The "printing presses" - referenced in the above comment by Ray - should include both bullish and bearish the "printing presses" of investment newsletters.
    8 Feb 2013, 12:42 PM Reply Like
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