Investor Sentiment: Extremes Persist

via zero hedge – on a long enough timeline, the survival rate for everyone drops to zero by thetechnicaltake on 12/26/10

It doesn’t take a rocket scientist (or Wall Street analyst ~ a downgrade?) to figure out that investors are extremely bullish on the equity markets.  Such extremes in sentiment will usually (85% of the time) lead to better risk adjusted buying opportunities in the future.  In other words, the next best time to be a buyer of equities will be when investors are bearish not bullish as they are now.  The markets don’t have to go down just because everyone is bullish, but if you are a “believer” and buyer at these levels, then you will need to identify a market top and get to the exits before the next guy to extract profits.  This is a very crowded trade and identifying the top is a tall order.

Investor Sentiment 12.26.10 http://d1.scribdassets.com/ScribdViewer.swf?document_id=45924298&access_key=key-1jwfmo2a4yd85eq424z2&page=1&viewMode=list