From this morning’s David Rosenberg note:
“I’ll do the worrying for everyone. How does that sound?
The latest Investors Intelligence poll was just released and showed the bull camp expanding its ranks yet again to 54.8% in the latest week from 52.1%. No matter how good you think the news has been, or how far central banks willing to go, it all looks to be discounted at this point. The reason I say that is because historically when the II poll moves into the 55-60% range, interim market tops tend to occur. Whether or not one should and how best to time the eventual “buy the dip” is open for debate, but it would be completely normal at this juncture to either see a dip or at least a pause. The bear share in the II poll is down to 25.8% from 28.7% and, as such, the bull-bear spread has widened to 29% – it was last there April 2011 – and we all know what happened next.
Bob Farrell’s rule number 9 jumps out as well after gauging the results of the latest Bank of America Merrill Lynch survey of world institutional investors.
Incredibly, a net 11% of portfolio managers are bullish on global growth, a massive swing from a net 27% who were downbeat on the macro outlook in December. A net 26% have now moved to an overweight equity position versus 12% last month – this 26% is the highest since January of 2011. A net 44% are overweight emerging markets and get this – 86% believe China will navigate a “soft landing” with growth between 7% and 9%. You have to get back to November 2010 to find the last time the global asset management industry was this positive on China. “
Source: Gluskin Sheff
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.
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