Personal Wealth Management / Expert Commentary
Ken Fisher Examines Where Investor Sentiment Stands Going into 2022
A valid question always is where investor sentiment stands
because, as I cite over and over and over,
sir John Templeton's legendary line, that bull markets are born on pessimism,
grow on skepticism, mature on optimism and die of euphoria is a piece of
And as we've moved from a world 12
years ago, with tremendous fear and pessimism of all things,
you're regularly forward into a world that at the beginning of this year,
as I've said,
was beginning to bite onto the early stages of euphoria,
that the concern about sentiment is a valid one.
But in fact, since about March,
while we've had a stock market,
that up until about a month ago was rip-roaring.
And over the course of the last month has kind of wiggle sideways.
We see sentiment actually having backtracked,
fairly significantly. A lot of the features that were
heavily beginning to get
a little bit scary, have backed off,
the huge surge that had occurred and set all time records
in Special Purpose Acquisition Funds,
which is a sort of a tricky way to do, alternative
initial public offering.
The move toward Non-Fungible Tokens,
which are these bizarre ways to have some thing be
traded at a very
high level, supposedly backed by some form of crypto.
And crypto itself and the spring spiking to record
These and other signs for example,
early in the year,
surveys from institutional investors showed up,
most institutional investors expecting to see mildly
higher prices year ahead. Now of course, stocks have done much better than that.
So they were wrong about that.
But now we've seen a world where they actually expect lower
prices by the end of the year, and they're almost always wrong.
So you should see that as a positive sign,
the back off in a Special Purpose Acquisition offerings,
both in terms of some that blew up and others that were
stalled off from regulatory concerns. And in fact, regulatory concerns,
not just from our government,
but also from foreign countries have led that
as well as crypto to become more, if you will,
down to earth, all of these are actually signs.
That sentiment is backed off.
John Templeton's line is a good one,
but the move from pessimism to a bull markets,
euphoria is not a straight line. It's a wiggly line,
it's a wiggly line a little bit like the stock market's wiggly.
And what we've had since March is that wiggling back into
an area that's now clear optimism,
but we're clearly not at euphoria.
We've got numbers of things that people wrongly associate with fear,
a fear for example, about what's gone on in Afghanistan,
which is a true human tragedy.
It's a humanitarian tragedy,
but it's the kind of thing that doesn't really impact capital markets,
capital markets are cruel mean non-caring and literally things like that.
We have a very long history of them in different forms.
Market don't care about that.
Things like the Delta variant and
fears about other future variants of COVID causing
when before people thought we were off to the races and along boom,
this also was an optimism that was always a false
optimism, because as I've said from early in the year,
what we really did was had a fairly strong upturn that was moving
us back toward normalcy. But then we hear people say,
and there's some validity to it, that what's gone on with
COVID has put restrictions in varied ways,
in varied places that has impacted some of the small
Some of the hospitality industry negatively impacted some
other parts of travel and that's all true,
but those features, all of them in aggregate are a tiny,
small percentage of the US or global stock
market ranging in the area of about 2%.
That is that, which is impacted is 2%.
So that tells you why it is that those things would get a lot of attention in
media don't have any real ripple over effect into the stock market.
These features have moved us back
into what I would call an area where sentiment now,
having wiggled backwards a little bit from where it had been now
has room to run.
As we move into the next leg of this long bull market.
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