Welcome Back Mom and Pops

Seeing the recent move in Apple, I suspected that the retail investor was getting back in the game. All the talk about Facebook seems to have turned retail investor attention back to the market. Up until now this was a suspicion I had but ICI reported  that investors put $3.62 billion into domestic funds last week. Retail investors are notoriously bad market timers. They were removing money hand over fist late this Summer and Fall. The caveat is that after removing money for so long they still likely have some dry powder.

5 comments:

zortrades said...

mother in law...not my mother

zortrades said...

my mother asked me about facebook yesterday. crazy

Tsachy Mishal said...

Crazy. People are talking about Facebook and Apple everywhere. I have a friend that says all the parents at his kids school are talking about it and he heard people on line at the bank talking about it.

If it were not for the fact that people sold everything late this Summer and Fall, I would be highly confident that this a sell point. Would be nice if we could get a correction and people calm down a bit.

Dirigi said...

Yeah, but there is a crazy amount of put buying (ISE), and the VIX is climbing up double digits, all that while the market barely goes down.
Doesn't that account for fear ?

Tsachy Mishal said...

I look at a long list of sentiment indicators. The vast majority are saying that there is excess optimism. There is always one indicator that is out of line at every top and bottom. You have to look at the whole picture, not just the one piece that fits with what you want to believe.