Inliers: Not Every Swan Is Black
I listened to really smart bond guys that love stocks in here. I heard from some of the sharpest stock guys that love cash in here. I was told anecdotally about some of the most conservative investors who are all of the sudden looking to get into anything at all in here. And that was just yesterday.
Bears have pressed short interest higher right in the middle of a 12-week (and counting) streak of net fund inflows from the Bulls. The battle lines are drawn. Yet the most anxious of all appear to be the record crowds in cash, worried that’s being turned into trash. So where do we go from here? Even bloggers, a group not short of opinions, have suddenly lost their keyboards with that answer.
Birinyi & Associates keeps track of the top investment blogs’ sentiment. The “neutral” among them have hovered around 20% for most of the 12 months. In the last 2 months, confusion rallied “neutral” all the way up to 55%.
Perhaps the most fascinating to me, of all the different opinions and datapoints recently, is the one I found where many bulls and bears are correlated for the first time that I've ever seen. More on that in just a moment.
But first, I think most investors are looking for something, anything that is consistent in a world without solid 5-year growth like that pictured in the chart below.
What is it? A group of completely transparent managers accountable for their own results while delivering a product with world-class accuracy that takes only seconds to manufacture. Too unusual to possibly be true? Well, they used to be. You're looking at a chart I made of the number of Google searches for “black swan.”
Copyright 2009 Minyanville Media, Inc. All Rights Reserved.
"That's the 2009 move on the 30-year Treasury yield. Making the leap from this unchartered flight (I'm getting the hang of this swan hyperbole), are a lot of fears that this is another reason for stocks to revisit lows because [it's the last thing a fragile consumer can handle]...." -
i'd add, except for the (growing number of) retiree-consumers, who might snag 5% fee-free yields with a guaranteed return of principal -
which for some us, is probably a lifetime annuity...without giving up the initiating investment ;-)
great article with nice thinking re the levitation act the markets seem to be balancing within -
in many ways (within a larger lens, as i've often heard it said here in the 'ville) it might be that, from under 1000 to above 870, is itself still a "range"
just wanted to add that your chart above of the 3 good times for stocks, reminds me (loosely) of john mauldin's ideas re pe valuation cycles for stocks that favor (or not) being in stocks
nice stuff ryan, thanks!
However I do take issue with your claim that the yield on the 30 year Treasury hasn't "soared". Please take Friday's closing yield and divide it by the yield on January 1, 2009. Then annualize. As this sort of return is a pittance, please let us Minyans know when your firm can achieve it and I'm sure you will be running more money than Blackrock shortly thereafter!
It would be interesting to compare treasuries and silver and gold to those stock market charts (compunded interest).
Good thing we had a war in 1940 or that 25 years from 1930-45 would have gone on a lot longer.
Well done, like the charts, good food for thought.
Where is that mattress?
