Monday, March 22, 2010


(Click to enlarge)

I wonder who is buying stocks and keeping the U.S. equity markets buoyed? I've read numerous articles stating how the sentiment of most investors is keeping them on the sidelines. But this graph tells a different story from an investment standpoint. It seems to indicate that most investors are quite bullish on the market (Wall Street), while Main Street seems to feel differently. More information is on the Pragmatic Capitalist article.

I've said it many times before, but the fact that credit is virtually nonexistent, the housing industry is in the shitter, and the unemployment stubbornly hangs around ten per cent (one can only imagine the, ahem, underemployed and those that have given up search for any meaningful employment), I don't see from where this sentiment originates. How can these companies be meeting or exceeding earnings expectations when consumers are overspent, increasingly underpaid, and living in houses that they cannot afford. And if 70%+ of our GDP is driven by consumer spending, this paints an even more baffling picture.

I've been told it's the hedgies, private equity funds and other non-individual investors, but then again, I buy into all sorts of conspiracy theories. But do you really feel that an 18% gain last year reflected the true market performance?

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