MMMPARSLEY1

The Bears' Skepticism Is Getting Old

InvestBaboo,

While it's impossible to argue against the idea that the masses opinion of the safety of equities is a strong negative indicator, I don't believe the seekingalpha community is representative of the average investor. Most people in this community actively follow the newscycle, and have healthy skepticism about whatever they hear on CNBC. Moreover, a significant amount of the posters here have some skill in doing their own research and due diligence.

There are plenty of reasons to be bearish. The most significant one is that bear markets don't end at 22x projected year-end earnings. That's where we stand right now. A double from here would be valuing companies in a time of suspect growth at Internet Bubble PE's of 44x 2009 earnings! If valuations are halved from here because of the continued drag on earnings and the consequent weakness in investor sentiment, the market would be valued at a conservative, yet still fair, 11x 2009 earnings.

I offer that as only one example of legitimate reasons to be prudently bearish. I also want to caution you to believe the seekingalpha community shares the same demographic as the CNBC Jim Cramerites who are much more reliable negative indicators.

Dave




On May 17 12:28 PM InvestBaboo wrote:

> This is very good. Almost all the comments here are bearish and many
> extremely bearish in nature. By definition such overabundance of
> bearish sentiment in the early stages of a bull market is good because
> it helps sustain the rally and take the market to new heights.<br/>
>
> As I have always said everytime I have tried to judge the direction
> of the market based on my own anaysis I have been wrong. I just follow
> the trend. We have had a negative week and yet the charts don't say
> the trend has ended. If the trend does end I will jump ship and let
> my bearish emotions come out in full swing and have a good cry with
> all the bears. Meanwhile, I will finger those crispy currency notes
> I have in my pocket thanks to the recent bull market which I benefited
> from by just following the trend rather than sitting on the sidelines
> like most bears shaking their heads in disbelief. Why people just
> don't follow the market rather than sitting on the sidelines and
> trying to second-guess is beyond me!