Bloggers are leaning bearish but not extreme (yet)

[soccerluvof4]

This months report

http://tickersense.typepad.com/ticker_sense 

[Heart of Tin]

LOL. It looks like they were bearish through most of 2013, too. Did you mean to post this on the Wall of Shame and Comedy?

[Nords]

This months report

http://tickersense.typepad.com/ticker_sense

Well, that's a new gimmick.  I wonder if Mark Hulbert would even bother tracking it...

[arebelspy]

Didn't we decide this was ridiculous the last time you posted it?

http://forum.mrmoneymustache.com/welcome-to-the-forum/bloggers-sentiment/

In the poll (though admittedly with a small sample size of 16), not one single vote was cast for this being meaningful in any way.

LOL. It looks like they were bearish through most of 2013, too. Did you mean to post this on the Wall of Shame and Comedy?

ZING!

[SDREMNGR]

It's data.  However you want to take it.  Many people view these sentiment reports as contrary an indicators.   So when people are bearish, it's a good buying opportunity and when everyone is bullish,  it's time to sell.  Most lay investors and even most pros are reactionary and are bullish when the market has run up and are bearish when the market has already started going down.  It's the long term views that matter more.

[arebelspy]

It's data.  However you want to take it.

There are four cans of tuna on my shelf.  There's some meaningless data that's just about as relevant to one's FIRE and investing plans.  However you want to take it.

[LalsConstant]

But these are the opinions of bloggers.  Blogging has no meaningful barrier to entry. 

Bloggers don't have academic qualifications to be bloggers.  Bloggers are from every country on Earth.  Bloggers are people who comment in different ways on any number of subjects.  Bloggers are anybody and everybody imaginable.  Even if they are all commenting on the same subject, their status as "blogger" means nothing.

Why should "bloggers" be authoritative?

[arebelspy]

But these are the opinions of bloggers.  Blogging has no meaningful barrier to entry. 

Bloggers don't have academic qualifications to be bloggers.  Bloggers are from every country on Earth.  Bloggers are people who comment in different ways on any number of subjects.  Bloggers are anybody and everybody imaginable.  Even if they are all commenting on the same subject, their status as "blogger" means nothing.

Why should "bloggers" be authoritative?

They certainly aren't authoritative, but I suppose one could argue that IF they are a representative sample of people in general AND IF you can get useful "trading" data from knowing what the general public sentiment is, then it could somehow be useful...

I don't see either of those being the case, however.

[jba302]

It shouldn't be hard to extract the data and see if there's a correlation (with acceptable p-value) to the actual market results. Either they are mostly right, mostly wrong, or it's complete chaos. I would guess chaos.

[arebelspy]

It shouldn't be hard to extract the data and see if there's a correlation (with acceptable p-value) to the actual market results. Either they are mostly right, mostly wrong, or it's complete chaos. I would guess chaos.

But even if there is (which, like you, I would doubt), can you profit off of it?  I would bet no.

[Nords]

It shouldn't be hard to extract the data and see if there's a correlation (with acceptable p-value) to the actual market results. Either they are mostly right, mostly wrong, or it's complete chaos. I would guess chaos.

But even if there is (which, like you, I would doubt), can you profit off of it?  I would bet no.

There are roughly a bajillion startups trying to parse Twitter feeds (of millions of posts per day) to determine market sentiment.  One of the leaders is Contix, but that's largely because they have a crack team of AI experts, programmers, and traders... who after two years and well into six figures of funding have yet to conclusively demonstrate that a Twitter feed will accurately predict a short-term market movement. 
http://www.contix.com/

Meanwhile behavioral psychologist Dr. Daniel Crosby's newly-developed "Crosby Irrationality Index" sits at the upper edge of optimism, without quite sliding into "mania" territory...
http://incblot.org/uncategorized/is-now-a-good-time-to-buy-stocks/

Here's the background, which is at least as credible as the opinions of 16 volunteer bloggers:
http://incblot.org/uncategorized/how-irrational-is-the-stock-market/

The Crosby Irrationality Index combines a number of fundamental and technical indicators indicative of market psychology and weights them relative to their historical predictive power. As a result, we are also able to report implied returns for one month, one year and three year periods based on the current level of market fervor. These implied returns should be understood less as specific return predictions and more as evidence of economic head or tailwinds.

The implied returns are indicative of what we might expect given the current level of market irrationality, all other things being equal, which they of course never are. For example, the current implied returns for three years from now are -6.817. While I’d never bet that the realized returns would be exactly -6.8 for that time period, the strength of the negative prediction does give me pause when considering how best to invest.

But enough already, you’re here for the index score, which is as follows:

The Five Strata of the Crosby Irrationality Index
Revulsion – 0 to 19 CII
Watchfulness – 20 to 39 CII
Equilibrium – 40 to 59 CII
Optimism – 60 to 79 CII
Mania – 80 to 100 CII

Current CCI Score:  75.8 (optimism approaching mania)

Implied Returns – parentheses denote negative expected returns
One Month – (.1061)
One Year – (2.598)
Three Year – (6.817)