After all, with the bar set so low, is most of the bad news already priced in?
Importance of Extreme Investor Sentiment
It is quite common to see irrational herd behavior among investors, especially if they all move together in stock trading.
Just think about it: if everyone is optimistic and buying, who else is left to keep buying the stock and push it higher?
Or alternatively, if everyone is pessimistic and selling a certain stock, there will come a point when the number of potential buyers far exceed potential sellers.
This is the goal of Contextuall: to identify examples where herd behavior has reached extreme levels.
We believe that, by identifying these areas of one-sided sentiment, investors could use these contrarian signals as a starting point for their own research.
Sentiment Stats: Gold Fields Ltd. (GFI) Compared to the Gold Miners Industry
44.0% of headlines have been classified as Negative, vs. an industry average of 16.94%.
Considering the extreme pessimism behind the stock, and our note on herd behavior, what do you think of the stock's outlook? Have investors become too negative? Is the upside potential greater than the downside?
Any comments on these sentiment trends? Let us know in the comment section.