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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: marc ultra who wrote (791)	3/18/2001 12:40:55 AM
From: piscatologist	Read Replies (1) \| Respond to of 10065

"Considering the Dow itself has IBM, EMC, HWP MSFT, INTC, CPQ etc." i have held EMC since before it was included in the s&p 500, but i don't recall it being included the the dow. CPQ?

To: marc ultra who wrote (791)	3/18/2001 1:17:19 AM
From: Math Junkie	Read Replies (1) \| Respond to of 10065

Great discussion. I've been trying to decide which would make me feel worse: the market falling if I stay in QQQ, or the market rallying bigtime if I sell.

To: marc ultra who wrote (791)	3/18/2001 1:18:19 AM
From: marc ultra	Respond to of 10065

Investor's Intelligence readings at some major market bottoms/bull market starts. Numbers represent the usual Bulls/(bulls+bears). Note this is calculated from a graphic that WSW puts up once in a while when Ruykeyser mentions how wrong these people are. I haven't discussed this for a very long time so I figure I'll do it now Interestingly three different times there was a reading of 43%. These were on 12/16/74, 8/6/82 and 9/11/98. On 7/26/63 it was 38% when a bull started. On 11/25/88 it hit the lowest reading I have which was 27.6% On 7/1/94 it hit 30.7. All of these readings were followed by huge bull market gains. A note of caution though. While these were the reading at significant bottoms at best we can say these demonstrate "sensitivity", i.e. when major bottoms occurred, sentiment was very bearish. What I don't have is a mass of data that shows what happens every time a sentiment reading reached an extreme one way or another. So I don't have the info that says how often an extreme sentiment reading was e.g. followed by a major market change, a modest correction one way or the other, or just evaporated without any market event. So the above suggests in statistical terms, along with the data I have in the other direction, that extreme sentiment readings likely have a high sensitivity for major market inflection points. However what can not be comfortably said is the more important issue for an investor. That would be what is the specificity of an extreme sentiment reading for a major market turning point. Put simply if I see a very extreme sentiment reading can I assume a big market turn in about to happen? The answer to that is not with any degree of certainty from just my numbers here. Those numbers exist and if someone wants to spend their life searching for the data and coming up with predictive values of a major market change from any given sentiment number, have fun and let me know what the result is. Marc