BofA Says Cash is King

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“BofA Says Cash is King as Investor Pessimism Hits 2008-Era High"

EOM

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BAML SURVEY only had bearishness has high one other time…day after 9/11

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Investor Pessimism Hits 2008-Era High

This is a bullish indicator. All the people who are certain that rates are going higher and therefor stocks are going lower … that sentiment is mostly already priced into the market. Certainly the projected rate increases this year are already priced in.

If you expect inflation to be resilient and the Fed to still be hammering higher and higher in 2023, then, yes, there’s a lot more to come.

Also if/when earnings get hammered by a recession, that would likely cause further bloodletting as the earnings estimates ratchet down.

So further down is certainly possible. Seems likely to me, too. But, have to have eyes open to the fact that soaring pessimism IS a bullish indicator.

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BAML SURVEYS. Again SURVEYS go back to about 1998

Only 1 other time=to today. Day after 9/11

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BAML SURVEYS. Again SURVEYS go back to about 1998

Only 1 other time=to today. Day after 9/11

What is your take-away from this result?

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CONTEXT

People are hyper bearish and scared. PERIOD.

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CONTEXT. People are hyper bearish and scared. PERIOD.

Okay, well thanks for posting.

As I noted extreme bearish readings of investor sentiment are a bullish indicator. I’m already mostly fully invested, but I did follow that cue to move a little money into stocks today.

This is in an account that only has access to mutual funds, no individual stocks, so the mix I am investing in there is Vanguard total stock market 40%, Vanguard total international 30%, Vanguard Strategic Equity 30% (an active fund, small-mid cap with a focus on growth and a portfolio composition that indicates a value tilt as well, .17% expense ratio. I’d prefer to have this bit in their small cap value index but it’s not offered in this account)

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As I noted extreme bearish readings of investor sentiment are a bullish indicator.

Investor can stay bearish for a longer time. You may get some short-term bounce from the oversold condition but that doesn’t make the market a bull market. Just be clear, are you trading for short-term or long-term? If long-term, then no need to hurry.

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“BofA Says Cash is King …

Cynical thought: sometimes it’s better to be a pundit than listen to one?
Berkshire owns a lot of BofA.
And probably isn’t raising cash today.

Jim

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