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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Michael Burry who wrote (8300)	9/17/1999 4:24:00 PM
From: Q.	Read Replies (2) \| Respond to of 78826

Mike, re. <<When you say bottom, what's your time frame? >> Using sentiment indicators allows you to pick a bottom that will hold for an intermediate time scale, generally at least a few weeks, and often for several months or more. The time scale here is determined by the inertia of the greed/panic emotions of people. Investors change from one to the other on a time scale of weeks or more. Sentiment indicators are useful only when they reach extreme values. They are most precise, in their timing, for indicating a bottom. They are much less precise for a top. Comparison of sentiment to price-based indicators, such as support: There's no real limit (other than zero) to how low a price can plunge, but there is more or less a limit to how panicky investors can get before they sell. Once they reach that panic level, anyone who is going to sell has already sold. That's the bottom. Price charts show you how far the stock has fallen, but not how far it still can fall. Sentiment indicators show you how far you are away from a level of maximum panic.