Monday, August 04, 2008

Mr. Market goes alligator watching

A quick check on AAII’s sentiment survey reading for July 31 showed bullish sentiment rose to 40%, from 35.8% on July 24 and bearish sentiment fell to 41% from 44%. Not surprising, our Anxiety Index went down. Just two weeks ago, bullish sentiment was a lot less and bearish sentiment was a lot more than average. Can a normal investor make sense of this sudden shift?

Well, Mr. Market is not a normal investor but he surely is helpful. For instance, on a recent tour boat trip down the Florida Everglades, Mr. Market heard a thrashing sound in the waters. Curious fellow that he is, he got up from his seat and ambled over to the railing. The sight of a 3,000 point alligator (aka meat grinder) sniffing around for dinner got Mr. Market all worked up, which happens every so often. He got so excited and made such a fuss that all the other passengers jumped out of their seats and hurried over to the other side to see what all the excitement was about.

Now, let's think for a minute. Hearing all the hubbub and seeing 100 passengers going to the other side of the boat and leaning over the railing to get a good look at whatever it was that Mr. Market was enthralled over, would you grab your digital camera and say to your spouse, "Honey, I'm gonna get me a picture of that alligator if that’s the last thing I do!"

Or would you keep your seat and your cool, ignore the crowd, and locate the nearest life preserver storage box and lifeboat?

Click this not-so-exciting chart to open a larger not-so-exciting chart -

2 comments:

  1. Hey everybody -
    I apologize for the multiple posts...I can't seem to get my image linked correctly...

    ReplyDelete
  2. Jonathan,

    Interesting to see that AAII has bullish sentiment rising!

    Also, thanks for visiting my blog.

    ReplyDelete

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