{"id":38006,"date":"2013-04-30T12:38:06","date_gmt":"2013-04-30T16:38:06","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=38006"},"modified":"2013-04-30T12:38:06","modified_gmt":"2013-04-30T16:38:06","slug":"what-does-the-big-money-say","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/04\/30\/what-does-the-big-money-say\/","title":{"rendered":"What Does the Big Money Say?"},"content":{"rendered":"

By The Sizemore Letter<\/u><\/a> <\/p>\n

74% of money managers are bullish on U.S. stocks, according to Barron\u2019s<\/i><\/a>, an all-time high by the magazine\u2019s measurement.\u00a0 Only 7% were bearish.<\/p>\n

Uh oh.<\/p>\n

\u201cAll-times highs in bullishness\u201d is not something I generally like to hear.\u00a0 If these managers are talking their book\u2014and we have to assume they are\u2014then this means they are likely already invested aggressively and thus have little in the way of new buying to do.<\/p>\n

Sentiment indicators generally fall into one of two camps: \u201cdumb money\u201d indicators that use the sentiment of rank-and-file investors as a contrary indicator and \u201csmart money\u201d indicators that seek to tag along with big, successful investors.<\/p>\n

Barron\u2019s<\/i> Big Money poll definitely falls into the \u201csmart money\u201d camp, though off-the-charts readings like that give me cause for concern.\u00a0 Still, the fact that the Big Money managers are significantly more bullish than the investing public is a good sign; it\u2019s when the smart money is bearish and the dumb money is bullish that you should be most wary.<\/p>\n

What else did the Big Money have to say?<\/p>\n

They consider energy, financials, and technology to be the best bets for the next 6 to 12 months and are pretty bearish on utilities.\u00a0 Apple (Nasdaq:$<\/span>AAPL<\/a>) <\/b>and Google (Nasdaq:$<\/span>GOOG<\/a>)<\/b> are simultaneously rated as \u00a0\u201cfavorite\u201d stocks for the next 6 to 12 months and as two of the most overvalued.\u00a0 Go figure.<\/p>\n

90% gave a \u201cthumbs down\u201d to the battered JC Penney (NYSE:$<\/span>JCP<\/a>),<\/b> though this was before it was announced that legendary speculator George Soros had taken a large position in the stock.\u00a0 And 96% gave fellow retail also-ran Sears Holdings (Nasdaq:$<\/span>SHLD<\/a>)<\/b> a thumbs down\u2014not exactly a vote of confidence in principal shareholder Eddie Lampert (see \u201cIs Sears the Next Berkshire Hathaway?<\/a>\u201d).<\/p>\n

Interestingly, 62% were bullish on perennial train wreck Japan, whereas only 35% were bullish on Europe\u2014despite the fact that the crisis appears to have been stabilized for the time being.\u00a0 And 83% expect the euro to fall relative to the U.S. dollar.<\/p>\n

What conclusions should we draw from this?\u00a0 Truth be told, we should be careful not to draw too broad of conclusions.\u00a0 The Big Money poll, like all sentiment indicators, is a snapshot of the market\u2019s mood at a particular point in time.\u00a0 This is not revealed gospel truth that you should use as the foundation of a major investment decision.<\/p>\n

All the same, if you are bullish, it is reassuring to see that a lot of smart people with a lot of assets under management agree with you.<\/p>\n

This article first appeared on MarketWatch<\/a>.<\/p>\n

SUBSCRIBE\u00a0<\/a><\/strong>to\u00a0Sizemore Insights<\/em>\u00a0via e-mail today.<\/p>\n

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