Large Investors Underinvested

I have been arguing for weeks that large investors are underinvested. A Bloomberg story this morning backs my suspicion:
Rallying stocks have done little to entice professional money managers back to U.S. equities.

A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 44.5 last week from 43.9 at the end of 2011, holding close to the lowest level since 2009, according to International Strategy & Investment Group. Compared with the price of the Standard & Poor’s 500 Index, managers’ so-called net exposure is close to the lowest since June 2008, the ISI data show.

I believe that today's action is largely underinvested managers jumping back in the pool. If hedge funds are as underinvested as this article implies it will take a lot more than one day before they are fully invested.


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