Edscharp,
You make some interesting points (your ad hominem attacks on me and the SI Team notwithstanding).
You've probably heard the saying "lies, damn lies and statistics". Like you, I thought about some of the issues regarding collecting statistics on investor opinions.
Essentially, you're arguing that our "Investor Sentiment" charts wouldn't alter any investment decision you made because (a) it could be biased, depending on the participation, and (b) it pertains to a stock and not the market in general.
BIAS: A great argument, and one that I think applies to almost all investment information. When someone is basing an investment decision on research, they need to consider the source. Whether one is reading a message board (where pumpers and bashers occasionally hangout), press release (written by the company), balance sheet (see Worldcom), brokerage report (see recent legal settlements), etc. the potential bias must be considered.
The "Investor Sentiment" feature gathers forecasts from investors (one registered user, one vote), employs filters and calculates a composite chart. The hope is to be an improvement over existing methods of evaluating individuals' views on a stock.
ONE STOCK VS. OVERALL MARKET: I agree with you that a random telephone survey of investors asking about their opinions on the market can be useful. (NOTE: "Investor Sentiment" charts are also available for the major indices.)
I think, though, it's fair to say that investors can be more bullish or bearish on an individual company than they are on the market as a whole. Maybe defense stocks are looked upon favorably when the economy is depressed because of war worries. There are many potential examples.
Could you envision an "Investor Sentiment" chart meeting some reasonable criteria for being a good indicator? Telephone surveys only cover a few hundred people at most out of millions of investors. I can see SI covering a similar composite of investors for certain stocks and for many indices.
(Anyone else have thoughts on this, or what they'd like to see with this feature?)
Thanks for the input and your opinion, if you do respond please attack the ideas and not the man.
John Busby |
