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Thanks Scott for the link. With total bond fund inflows continuing to swamp the total equity outflows, I am actually becoming more bullish on equities. And with the strategists followed by Bloomberg advising a low 52% allocation to equities, I become more bullish on equities:
Furthermore, according to the latest AAII Sentiment Survey, the bullish sentiment fell to an 8-month low, which again makes me more bullish on equities:
Reply to @kevindow: There's a general dislike towards equities by much of the retail population, it seems, which now includes rich people (according to a poll CNBC was discussing yesterday), who are buying diamonds and other things - hard assets (http://www.cnbc.com/id/47446781). "A recent survey from Harrison Group and American Express Publishing found that the wealthy have cut back their allocations to stocks dramatically since the economic crisis."
Personally, my view:
If you are near retirement age, it's understandable not wanting to take considerable risk and focusing on fixed income.
Otherwise, as I noted in another thread, I really don't understand buying treasuries here, and while corprates and dividend paying stocks are fine and great, the race for yield is an immensely crowded trade - everyone and their cousin wants yield. That trade could go on for years, potentially, but I think it gets to a point where people may look at yield first and fundamentals second.
People definitely don't like stocks (please, someone start liking stocks so CNBC can STFU about how the retail investor hasn't come back - it's getting to the point where I can't even have it on in the background - and now CNBC's number one idiot, Steve "Baghdad Bob" Leisman just said that the US is better off than the rest of the world, because look at this great Facebook IPO we're doing), and while the sentiment could be an indicator in favor of them, I think people have to be able to deal with what I think will be continued significant volatility because problems (like Europe) continue to be postponed and keep coming back.
I don't think many people are willing to deal with that kind of volatility and furthermore, I think people see what's going on and - whether they're eventually going to be proven right or not - it just reinforces their view that the market is rigged, the market is too risky, the market is... (fill in the blank.) I will say that - and I've said this before - if the market really cracks again there will be tumbleweeds blowing through the NYSE - you'll lose the interest of another large portion of the population, both wealthy and not.
Personally, I have some funds and a number of individual holdings where I think there's a compelling long-term story/theme and fundamentals (as I noted yesterday, largely overseas.) What else can ya do?
As for rich folks, I think their view and their pulling money is why you've seen a number of hedge fund managers looking for "permanent capital" (Ackman: "... with permanent capital we can be more opportunistic during periods of market and investor distress.”) by either going for a public fund (Loeb, possibly Harbinger and Ackman now apparently early in 2013 - http://www.insidermonkey.com/blog/ackman-to-go-public-with-pershing-square-holdings-in-2013-11985/) or a reinsurance company (Loeb, Einhorn, SAC) or are funds converting to mutual funds (RLSFX and the new Pimco Long/Short fund.)
Comments
Wondering what the world equity flows will indicate during the next period?
http://www.bloomberg.com/video/92423441/
Furthermore, according to the latest AAII Sentiment Survey, the bullish sentiment fell to an 8-month low, which again makes me more bullish on equities:
http://pragcap.com/aaii-the-return-of-bearish-sentiment
Kevin
Personally, my view:
If you are near retirement age, it's understandable not wanting to take considerable risk and focusing on fixed income.
Otherwise, as I noted in another thread, I really don't understand buying treasuries here, and while corprates and dividend paying stocks are fine and great, the race for yield is an immensely crowded trade - everyone and their cousin wants yield. That trade could go on for years, potentially, but I think it gets to a point where people may look at yield first and fundamentals second.
People definitely don't like stocks (please, someone start liking stocks so CNBC can STFU about how the retail investor hasn't come back - it's getting to the point where I can't even have it on in the background - and now CNBC's number one idiot, Steve "Baghdad Bob" Leisman just said that the US is better off than the rest of the world, because look at this great Facebook IPO we're doing), and while the sentiment could be an indicator in favor of them, I think people have to be able to deal with what I think will be continued significant volatility because problems (like Europe) continue to be postponed and keep coming back.
I don't think many people are willing to deal with that kind of volatility and furthermore, I think people see what's going on and - whether they're eventually going to be proven right or not - it just reinforces their view that the market is rigged, the market is too risky, the market is... (fill in the blank.) I will say that - and I've said this before - if the market really cracks again there will be tumbleweeds blowing through the NYSE - you'll lose the interest of another large portion of the population, both wealthy and not.
Personally, I have some funds and a number of individual holdings where I think there's a compelling long-term story/theme and fundamentals (as I noted yesterday, largely overseas.) What else can ya do?
As for rich folks, I think their view and their pulling money is why you've seen a number of hedge fund managers looking for "permanent capital" (Ackman: "... with permanent capital we can be more opportunistic during periods of market and investor distress.”) by either going for a public fund (Loeb, possibly Harbinger and Ackman now apparently early in 2013 - http://www.insidermonkey.com/blog/ackman-to-go-public-with-pershing-square-holdings-in-2013-11985/) or a reinsurance company (Loeb, Einhorn, SAC) or are funds converting to mutual funds (RLSFX and the new Pimco Long/Short fund.)