The mystery behind the blogger sentiment poll
No matter the market direction, one thing is constant The Ticker Sense Blogger Sentiment Poll, a survey of the web's most prominent investment bloggers is always bearish.Nothing can make these so called "prominent investment bloggers" bullish. In the meanwhile markets have gone up since the poll started.
The bloggers participating in it are:
24/7 Wall St.
Now some of these are very short term day traders and one can discount their opinion, but many others claim to be long term traders or macro traders. As a group they have been bearish since the first poll started with just 2-3 positive readings.
Now the participants of this poll are very touchy when their bearishness is questioned. They offer all kinds of excuses. Most common being that they are bearish on market but actually bullish in their personal trading, or if you see my paid newsletter it is bullish and other more creative explanation.
People trade what they believe. If your belief are perma bearish, it is extremely difficult to trade opposite of that because there is lack on conviction. So if these bloggers actually trade what they believe, they should be losing money or underperforming the market substantially.
The second problem is even bigger, if , as some of them claim, that in reality they are bullish in their actual newsletter or trading then they are just misleading readers with these bearish views or lying. So they are just closeted bulls. They are better than James McGreevey in hiding that fact.
The third mystery is 99% of these prominent bloggers are practitioners of technical analysis, use trend lines, or use moving averages or other esoteric indicators. No matter which indicator you are using or the brand of technical analysis you were using , it was bullish during the time frame. So may be these bloggers don't know how to use the tools they use.
So there is great mystery as to what makes these prominent bloggers perma bears.
Earlier post: Popular blogger as contrarian indicator
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8 comments:
Pradeep, you really need to include a shout-out to the bloggers that are willing to disclose their vote and are pretty consistently bullish. The bearishness of the poll has a lot to do with the chickenshit bastards that vote bearish every week without disclosing it.
Oh, don't forget, YOU use technical analysis in your trading. It might be better to reserve your scorn for "conventional" TA and not TA as a class.
Anyone interested in seeing the history of my votes can find them here:
http://www.billakanodoodahs.com/category/general/
I'm underperforming the market YTD, precisely because I deviated from my usual bullish pattern and bet on a third leg down in the correction of Feb/Mar.
Oh, I took the blogger poll to task last year:
http://www.billakanodoodahs.com/2006/12/we-have-some-bearish-bloggers-out-there/
But rather than just complain about it, I thought I'd try to balance out the poll by adding my (usually bullish) two cents to it.
Pradeep, you might consider participating in the poll and publicly disclosing your vote every week. You might enjoy it.
Most real traders that make their living full time from the markets and that have proprietary methods don't post their stuff online for free. Only a handful like Carl Futia really know what they're talking about.
This year-long market upswing will end in July. The expectations have been increased LBO's, contained inflation, lowering of interest rates, and strong corporate profits for nearly the past year. Expecations will not be met later this year as current interest rates will decrease LBOs and hurt prospects of future earnings. Additionally, Japan could raise rates putting upside pressure on the Yen. There are many downside risks. Look for the blogger poll to become very bullish in July. I am calling it now.
"No matter which indicator you are using or the brand of technical analysis you were using , it was bullish during the time frame."
Not true. If you rely on overbought and oversold measures as sell signals, such as Stochastic or RSI, there were a number of occasions that would have been profitable to the bear (on short time frames).
There's more than one way to skin a cat, and more than one strategy that make's money . . .
Bill
Why would any sane person want to be part o a group where perma bears outnumber the bulls 2:1. The poll has hard time breaking even 35% on bullish levels.
the market speculator
That same stochastic also showed bullish reading during that time, which is never reflected in the poll.
The majority of "prominent bloggers" know only one way to make money that is by being perma bear. Statistical evidence and evidence of some of their own publicly available track record shows them underperforming the market substantially.
I've asked myself the same question, and had a series of emails with the entire group asking them the same thing. Some of the responses were pretty thoughtful, some were thoughtless, stupid, and insulting (Hi Larry from The Kid!), but I guess everybody has their reasons for participating. Personally, I like to think that by both voicing my opinion of the overall group's biases AND by participating, I'm doing more to correct that bias than I would if all I did was voice my opinion. Also, I think I get some traffic out of it, especially on the very bearish weeks when I'm one of the few that have a "bullish" vote disclosed.
I agree with your arguments when applied to the group as a whole, and to the majority. I do think, however, that there is a sizeable minority, enough of us, disclosing our votes and voting bullish over most of the history that we deserve some mention among the overwhelmingly negative discussion you tend to make on the subject, and I would feel that way even if I wasn't a participant. You know who the other guys are! Give'em a mention!
From Bloomberg, "securities firms and hedge funds, including Goldman Sachs Group Inc. and Blackstone Group LP, are hiring bankers who specialize in so-called distressed debt. They're anticipating that the current boom in leveraged buyouts will give way to a market bust before long."
Actions speak louder than words.
Pradeep,
Been bearish in opinion does not necessarily correlate to been short the market. Bearishness may correlate to a higher cash holding (and with rates climbing this is not necessarily a bad thing) while still holding stocks on the long side (which partake in the rally). The expectation would be for underpeformance, but if someone was bearishness with a small exposure to stocks, but those stocks were drawn - for example -from the IBD 200 list using your methods they would probably be ahead of the market.
Success and failure is not black and white, bearish and bullish, fundamental and technical - each group will have winners and losers.
Best wishes,
DJF
These are all rationalizations. The question in the poll is straight forward.
As to valuation argument, look at value funds, they are having good year. They are not finding trouble finding value.
The problem is overwhelming number o bloggers in that poll are perma bears. Which they don't want to accept.
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