"According to information published by Investor's Intelligence, which tracks investor sentiment via the newsletters, at the end of 1972, when stocks were about to tumble, optimism was at an all-time high, with only 15 percent of the advisors bearish.
At the beginning of the stock market rebound in 1974, investor sentiment was at an all-time low, with 65 prcent of the advisors fearing the worst was yet to come. Before the market turned downward in 1977, once again the newsletter writers were optimistic, with only 10 percent bears.
At the start of the 1982 standoff into the great bull market, 55 percent of the advisors were bears, and just prior to the big gulp of October 19, 1987, 80 percent of the advisors were bulls again.
The problem isn't that investors and their advisors are chronically stupid or inperceptive. It's that by the time the signal is received, the message may already have changed. When enough positive general financial news filters down so that the majority of investors feel truly confident in the short-term prospects, the economy is soon to get hammered.
What else explains the fact that large numbers of investors(including CEOs and sophisticated business people) have been most afraid of stocks during precise periods when stocks have done their best while being least afraid precisely when stocks have done their their worst."
Thus one has to be dynamic and way ahead of the crowd to make money from the market as else one will be in the league with those who are on the wrong side of the stock market.
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