Just when you thought investors couldn’t possibly get more bullish they surprise to the upside. This morning’s Investor’s Intelligence survey showed a fresh high bullish reading of 58.8%. This is the highest reading since the second week of October 2007 – just one week shy of the all-time market high of 1565 on the S&P 500.
With bears at just 20.6% the bull/bear differential is 38.2%. As previously mentioned, this is a very rare differential and over the last 10 years has been consistent with market inflection points. This market has literally defied gravity in recent weeks as sell-offs have become practically non-existent so it’s important to remember that the market can stay irrational longer than you can stay solvent.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.