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Gold/Mining/Energy : Daytrading Canadian stocks in Realtime -- Ignore unavailable to you. Want to Upgrade?

To: Vitalsigns who wrote (52320)	7/25/2001 9:50:54 AM
From: parker_meridian	Read Replies (2) \| Respond to of 62348

Pessimism flashes a 'buy' signal Investor surveys: Value investor says bearishness is contrarian sign Steve Maich Financial Post American investors are as pessimistic about their financial prospects as they've been since 1996, according to a new survey by UBS PaineWebber Inc. But that might actually be a contrarian signal to buy stocks. The brokerage's monthly index of U.S. investor sentiment fell to 84 this month, the lowest since the survey was started five years ago. Just 40% of the 1,000 U.S. investors polled said they feel optimistic about the stock market, compared with 45% last month. The results seem to support Manulife Financial Corp.'s Canadian survey, released last week, which showed just 38% believe now is a good time to buy stocks. "The recent performance of the financial markets and the expectation for continued volatility is taking its toll on investors," said Mary Farrell, UBS's senior investment strategist. There's no doubt that negativity continues to be a drag on the North American market, said Irwin Michael, who manages about $250-million at ABC Group of Mutual Funds in Toronto. "Investors perceive the market right now to be extremely volatile and treacherous," Mr. Michael said. "When the market's running fast and heavy, everyone's full of bravado. There's no bravado out there now." But before bailing out of your RRSP, consider that investor optimism isn't usually a good predictor of the market's direction. In March, 2000, the UBS survey showed the optimism index riding high at 178, with 73% of investors saying it was a good time to invest in the markets. Little did they know that the Nasdaq was on the edge of a major plunge, in which 67% of the market's value would disappear in the next year, dragging stock markets around the world down with it. The survey is conducted by the Gallup Organization and polls 1,000 random investors about their expectations and predictions in the first two weeks of each month. The survey is considered accurate within plus or minus three percentage points, 19 times out of 20. All the negativity revealed in the July responses might indicate brighter days are ahead, Mr. Michael said. "When everyone has virtual unanimity about which way things are going, the opposite usually happens," Mr. Michael said. "If everyone's bearish, it's a great time because it means you're probably scratching bottom." smaich@nationalpost.com nationalpost.com