Apr

20

I occasionally look at the AAII (American Association of Individual Investors) weekly sentiment survey. I've not found any reliable use for it, except that when the AAII survey is uber-bearish, it's anecdotally a good time to start gently nibbling at stocks (when valuations are reasonable).

This morning's survey data may be apocryphal, but it's also interesting:

Bulls 2.2%; Bears 3.8%; Neutral 5%

The bull, bear, and neutral numbers are remarkably similar. So I looked at the history of neutral opinions:

From 2002 to 2007, the "average" neutral opinion was 25%. (Defined as the mean of the entire period for neutral.) From 2007 to 2009, the "average" neutral opinion was about 20.But from 2010 to the present, the "average" neutral opinion is over 28% and continues to climb higher!

There are some amusing/surprising (and perhaps interesting) conclusions:

1) The financial crisis marked a "bear market low" for neutral opinion.

2) Since then, we have been in a "bull market" for neutral opinion. Or more succinctly, the number of people who have "no clue" continues to rise sharply!

As everyone knows, I never have any idea what's going to happen. But perhaps I need to reconsider my position since it appears to be a "crowded trade…"


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