January 29th Blogger Sentiment Poll

Financial bloggers broke the 50% mark for bearish responses for just the second time since we began the poll back in July.

Blogger Sentiment Poll Participants:

24/7 Wall Street (-) Abnormal Returns  Ant & Sons (-) Alpha Trends (N) Bill a.k.a. nodoodahs (+) Big Picture  Bloggin' Wall Street  Capital Chronicle Carl Futia (+) Confused Capitalist  ContraHour  Controlled Greed (N) Crossing Wall Street  Crowder Blog (-) CXO Advisory (+) Fly on the Wall (N) Day Trade Team  Daily Dose of Optimism (+) Daily Options Report  Deal Breaker  Dr. John Rutledge  Elliot Wave Lives On (+) Fallond Stock Picks (-) Fickle Trader  Global Economic Analysis (-) Hedgefolios (-) Information Arbitrage (N) Daily Blog Watch  Kirk Report (N) Knight Trader  Learning Curve MaoXian  ChrisPerruna.com (N) Michael Comeau Millionaire Now (-) Naked Shorts (-) Peridot Capitalist (-) Quant Investor (-) Random Roger's Big Picture (-) SeekingAlpha  SelfInvestors Shark Report (+) Sigma Options  Stock Advisors  ShadowTrader  Tech Trader Daily  Trade King  Trader Feed  Trader Mike (N) Trader Tim (-) Ugly Chart  Wall Street Folly  WindRiver Blog  Wishing Wealth (-)

Comments

[Brian Schumacher]

Bearishness at a 6-month high. Bullishness at a 6-month low. This looks like a good opportunity to me.

[Bill a.k.a. NO DooDahs!]

I believe the list is dominated by perma-bears, that is, persons whose outlook on broader equities is persistently negative, regardless of evidence to the contrary. I will come up with a list of suggestions for improvements. The last time this poll had 50% bears, the SPX gained about 150 points, the INDU about 500, and the COMPQ about 50 points over the next month.

[Bill aka NO DooDahs!]

http://www.billakanodoodahs.com/2007/01/blogger-sentiment-poll-profoundly-broken/

Is the poll wrong this time? We’ll know in about 28 days! But the bottom line is, the Blogger Sentiment Poll by TickerSense is profoundly broken.

Strong words? Yes. Deservedly used? Let’s see.

Of the twenty-eight weeks the poll has been in existence, it has had bears exceeding bulls on twenty-five of those weeks. As an example of how wrong these bloggers can be, the first issue of the poll was Monday July 10, 2006. From then, until the latest poll on Monday January 29, 2007, the S&P 500 has returned about 12%. Yes, TWELVE PERCENT, a stronger return than the index usually gives in a full year, over a period where for twenty-four applicable weeks (I don’t count the last four weeks because we don’t know their outcome yet), the bloggers have been bearish for twenty-one of them.

I have identified the problem - you really can’t miss it - the list of bloggers being polled is dominated by perma-bears, that is, persons whose outlook on broader equities is persistently negative, regardless of evidence to the contrary. Not all of these bloggers are perma-bears, but enough of them are to seriously tarnish the results. Unfortunately, the pollsters allow participants to submit their votes anonymously, so we cannot go back and see exactly who the culprits are, but I have my suspicions. Hi, guys!

Why is this poll full of perma-bears? I can see three competing theories, but I am not sure which has more weight of evidence behind it. Perhaps all of them have some merit.

More at

http://www.billakanodoodahs.com/2007/01/blogger-sentiment-poll-profoundly-broken/

[Bill aka NO DooDahs!]

http://www.billakanodoodahs.com/2007/01/fixing-the-blogger-sentiment-poll/

I have a plan by which one could create a poll that has a reputation for accuracy, a poll where all the participants are above-board and graded publicly for their calls, and a poll that becomes a resource to be used and consulted by people who want to know what the best market strategists on the web really think. Unfortunately, such a poll is directly at odds with TickerSense’s stated goal of gaining “a consensus view on the market from the top investment bloggers.” It’s painfully obvious that the “top investment bloggers” are not good market-timers; the poll should be remade, with a focus on ability in the market, rather than prominence in the blogosphere. I shall bullet-point the improvement plan; give associated supporting detail; and then give the final specifications of the plan.

http://www.billakanodoodahs.com/2007/01/fixing-the-blogger-sentiment-poll/

[Tom Drake]

The concept of sentiment is to measure what the idiots are doing, not the smart boys. You can't make money from the smart boys.

I think Lazlo's poll makes good sense.