Today’s 5 Minute Podcast Covers The Following Topics. Why The Bear Market Will Start In 2014?
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TrimTabs reports Fund Flow Records Smashed Across the Board in 2013.
TrimTabs Investment Research reported today that U.S.-listed equity mutual funds and exchange-traded funds took in a record $352 billion in 2013, smashing the previous record inflow of $324 billion in 2000. Meanwhile, U.S.-listed bond mutual funds and exchange-traded funds redeemed a record $86 billion, topping the previous record outflow of $62 billion in 1994.
“The Fed finally succeeded last year in its long-running campaign to coax fund investors to speculate,” said David Santschi, Chief Executive Officer of TrimTabs. “The ‘great rotation’ that some market strategists long anticipated is under way.”
In a note to clients, TrimTabs explained that U.S. equity mutual funds and exchange-traded funds received $156 billion in 2013, the first inflow since 2007 and the biggest inflow since the record inflow of $274 billion in 2000. Global equity mutual funds and exchange-traded funds received $195 billion, edging past the previous record inflow of $183 billion in 2006.
There you have it. If you have been wondering what is causing this massive rally in the stock market, wonder no more. The stocks are “Melting Up” because everyone is “Panicking Into Stocks” and exactly at the wrong time.
Please note that the funds inflow smashed the 2000 record by about $28 Billion. While not significantly higher, it confirms what we have been talking about here. Primarily, the psychological factors behind the run up. People/funds are taking money out of Bond Funds and rolling them into Stock Funds at record numbers.
What’s wrong with that?
Technically nothing. People are free to do as they wish. Yet, from a historical perspective, this tends to happen late in the bull market. During the so called Blow Off Phase or the last phase of the run up. As I have mentioned many times before, today’s market feels exactly that way. Massive speculation, psychology of the crowd pushing everyone to be in the stock market, overpriced assets, weak underlying economic base and fundamentals that are driven by nothing more than a crazy expansion of credit by the FED. That’s just a few of the reasons.
The bottom line is this. The bear market is about to start. My mathematical work clearly confirms that. Be very careful going forward and think about getting out of stocks completely once the market confirms the reversal.
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Warning: Mutual Fund Inflows Are At Pre 2000 Collapse Levels. Same Outcome?
It’s hard to be a bear. No one likes bears. Here are the top 10 signs that you might be a bear hater as well.
This goes to all the bears out there.
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Why Do You Hate Me?
Carl Giannone says he’s given up hunting for quality stocks. Now he’s simply riding the wave of upward momentum in the U.S. market. “It’s a game of musical chairs,” said Giannone, who manages an equities team at T3 Trading Group LLC in New York. “You just want to make sure you can sit down.”
The Federal Reserve’s near-zero interest rate turns five years old next month, the longest period without an increase in history. Coupled with more than $3 trillion of asset purchases, it adds up to “Bernankecare,” said Joshua Brown, chief executive officer of Ritholtz Wealth Management in New York. And it’s causing parts of the market to behave strangely. Stocks of companies with weak balance sheets are rising twice as fast as stronger ones; junk borrowers get rates lower than their investment-grade counterparts did before the credit crisis; and initial public offerings are doubling on their first day of trading.
While in the minority, some investors say prices have climbed so high it’s possible to look ahead and see an ugly end.Laurence Fink, chief executive officer of BlackRock Inc., the biggest U.S. money manager, said in an interview with Bloomberg Television on Nov. 12 that he feared a bubble and the Fed ought to quit buying so many securities.
Read The Rest Of The Article Here
Have you ever seen a real bull orgy? I haven’t, but a fathom it would be a fairly gross site to feast your eyes upon. Luckily for you can see an artificial one by turning on CNBC or reading any other kind of financial media. Bulls are salivating over each other, predicting the DOW at 20,000, 25K, 50K, to infinity and beyond. It’s quite entertaining to watch.
The article above is right on the money. At this stage everything is in the speculative bubble that will pop and it has become a game of musical chairs. However, that is not why I bring this up. I want to point your attention to a psychological breakdown of market participants. We all know the saying “Buy Low Sell High” or “Buy When There Is Blood On The Streets”, yet not a single person I know actually does it.
Case and point, March 2009 bottom. Not a single person I know, not on TV or elsewhere advocated buying. No, they were all talking about the end of the world, how low the market will go and what stocks to short best. The blood was running on the street, the stocks were being given away and these fools couldn’t see the forest through the trees. Now the situation is completely reversed. When everyone should be selling and/or going short, everyone is screaming BUY, BUY, BUY. It’s a fools game and if you buy today you are that fool. I guess human psychology, the primary driver behind the stock market, will never change.
With such a backdrop it is very nice to know exactly when the Bear leg of 2014-2017 will start and the damage it will do. While Bulls are busy having their orgy, the market is getting ready for a massive haircut. You have been warned.
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CNBC Writes: Smart Money: Smart money? Looks like it’s mom and pop
For the most recent leg of the rally, it seems like the so-called smart money may not be so smart after all.
If that’s true, the smart money has been losing.
Employing even more conventional wisdom, that might suggest the market is forming a top and ready to fall, as retail investors are often thought of as the last ones to a rally.
That thinking, though, is getting challenged.
There’s no doubt the retail investor has warmed up to the market in 2013 after sitting out much of the gains since the March 2009 lows. The mom-and-pop crowd ripped just short of $300 billion out of mutual funds from the 2009 low point through the end of 2012 even as the market gained more than 110 percent during the span.
As I have mentioned in my previous posts, the overall BULLISH psychological backdrop is now at the extreme and flashing warning signs.
Various metrics aside, I see very few bears. Even people who used to be bears and now bulls. All popular media is overwhelmingly BULLISH. Even if the article mentions “a possible drop” such argument is immediately counter attacked by stating something to the tune of “If the market drops it would be a wonderful buying opportunity to add more stocks”.
The article above is no different. It clearly illustrates how bullish everyone is. It’s a well known fact that Retail investors are the last ones on/off and as such could not be considered as “smart money”. Over 200 years of market data teaches us that. Yet, somehow the article twists it to be so. Simply put, neither the market nor investors can do wrong in this market.
Will this continue? I do remember seeing similar type of prevailing BULLISH psychology before, at 2000 and 2007 tops. We all know how that ended.
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The Secret Behind This Stock Market Run Up
Carl Giannone says he’s given up hunting for quality stocks. Now he’s simply riding the wave of upward momentum in the U.S. market. “It’s a game of musical chairs,” said Giannone, who manages an equities team at T3 Trading Group LLC in New York. “You just want to make sure you can sit down.”
The Federal Reserve’s near-zero interest rate turns five years old next month, the longest period without an increase in history. Coupled with more than $3 trillion of asset purchases, it adds up to “Bernankecare,” said Joshua Brown, chief executive officer of Ritholtz Wealth Management in New York. And it’s causing parts of the market to behave strangely. Stocks of companies with weak balance sheets are rising twice as fast as stronger ones; junk borrowers get rates lower than their investment-grade counterparts did before the credit crisis; and initial public offerings are doubling on their first day of trading.
While in the minority, some investors say prices have climbed so high it’s possible to look ahead and see an ugly end.Laurence Fink, chief executive officer of BlackRock Inc., the biggest U.S. money manager, said in an interview with Bloomberg Television on Nov. 12 that he feared a bubble and the Fed ought to quit buying so many securities.
Read The Rest Of The Article Here
Have you ever seen a real bull orgy? I haven’t, but a fathom it would be a fairly gross site to feast your eyes upon. Luckily for you can see an artificial one by turning on CNBC or reading any other kind of financial media. Bulls are salivating over each other, predicting the DOW at 20,000, 25K, 50K, to infinity and beyond. It’s quite entertaining to watch.
The article above is right on the money. At this stage everything is in the speculative bubble that will pop and it has become a game of musical chairs. However, that is not why I bring this up. I want to point your attention to a psychological breakdown of market participants. We all know the saying “Buy Low Sell High” or “Buy When There Is Blood On The Streets”, yet not a single person I know actually does it.
Case and point, March 2009 bottom. Not a single person I know, not on TV or elsewhere advocated buying. No, they were all talking about the end of the world, how low the market will go and what stocks to short best. The blood was running on the street, the stocks were being given away and these fools couldn’t see the forest through the trees. Now the situation is completely reversed. When everyone should be selling and/or going short, everyone is screaming BUY, BUY, BUY. It’s a fools game and if you buy today you are that fool. I guess human psychology, the primary driver behind the stock market, will never change.
With such a backdrop it is very nice to know exactly when the Bear leg of 2014-2017 will start and the damage it will do. While Bulls are busy having their orgy, the market is getting ready for a massive haircut. You have been warned.
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!
It’s hard to be a bear. No one likes bears. Here are the top 10 signs that you might be a bear hater as well.
This goes to all the bears out there.
Did you enjoy this article? If so, please share our blog with your friends as we try to get traction. Gratitude!!!