Birchtree
Well-known member
Re: Birchtree's account talk
"Since the market bottomed and the new cyclical recovery bull market began, retail investors have gone on a collective buyer's strike. In other words, a classic repetition of the idealized market cycle is setting up perfectly. The lingering fear and pessimism from last year's abnormal market plunge put most investors in a state of catalepsy that persists even now. They are too frightened to take their capital out of zero-yielding safe haven investments and put that capital back to work where it is being most rewarded right now, namely equities."
http://safehaven.com/article-13002.htm
The financial markets will always act in the way for which the fewest number of participants are prepared. The result of our lengthy bottoming pattern caused those who tend to panic to sell in October and November 2008, while those who are impatient have been more likely to unload in recent weeks and even in recent days trying to play by bear market rules. Thus the financial markets have succeeded in eliminating all those who were encouraged to sell their stocks and mutual funds for emotional reasons. Ain't it the truth. Good values like we have today (C fund at $9.81) don't come around very often. For every crisis there is a corresponding opportunity. The year's crisis hasd brought equity and fund values to opportunity levels for those few with the courage to rumble with the bear.
The longer that amateurs and hedge funds are afraid to get back into the stock market, the longer it will be able to rally, and therefore the more elevated it will become in 2009. My summer target of 1380 for the SPX will be too conservative if amateurs continue to be afraid. Emotional investors are seldom rewarded as a group. With fund flows proving that there were historically high withdrawals during the past several months, the market will punish them in the best way possible: with a powerful rebound. As a rule of thumb, for each month that the market took to complete a bottoming pattern, the subsequent rebound tends to last for about 1 1/2 months - I calculate this rally will last into summer.
Big bull markets always find a way to keep you frightened and out. To get in you have to close your eyes, and just do it. We've had a few brave folks leave the sanctity of the lily pad this week - we don't want a big rush anyway.
"Since the market bottomed and the new cyclical recovery bull market began, retail investors have gone on a collective buyer's strike. In other words, a classic repetition of the idealized market cycle is setting up perfectly. The lingering fear and pessimism from last year's abnormal market plunge put most investors in a state of catalepsy that persists even now. They are too frightened to take their capital out of zero-yielding safe haven investments and put that capital back to work where it is being most rewarded right now, namely equities."
http://safehaven.com/article-13002.htm
The financial markets will always act in the way for which the fewest number of participants are prepared. The result of our lengthy bottoming pattern caused those who tend to panic to sell in October and November 2008, while those who are impatient have been more likely to unload in recent weeks and even in recent days trying to play by bear market rules. Thus the financial markets have succeeded in eliminating all those who were encouraged to sell their stocks and mutual funds for emotional reasons. Ain't it the truth. Good values like we have today (C fund at $9.81) don't come around very often. For every crisis there is a corresponding opportunity. The year's crisis hasd brought equity and fund values to opportunity levels for those few with the courage to rumble with the bear.
The longer that amateurs and hedge funds are afraid to get back into the stock market, the longer it will be able to rally, and therefore the more elevated it will become in 2009. My summer target of 1380 for the SPX will be too conservative if amateurs continue to be afraid. Emotional investors are seldom rewarded as a group. With fund flows proving that there were historically high withdrawals during the past several months, the market will punish them in the best way possible: with a powerful rebound. As a rule of thumb, for each month that the market took to complete a bottoming pattern, the subsequent rebound tends to last for about 1 1/2 months - I calculate this rally will last into summer.
Big bull markets always find a way to keep you frightened and out. To get in you have to close your eyes, and just do it. We've had a few brave folks leave the sanctity of the lily pad this week - we don't want a big rush anyway.
