Mar 072010
Are you a contrarian? Are you pessimistic?
Because I don’t think you can be both right now. Without getting into economic details, it does appear popular/easy to predict a decade of slow activity for the US, ongoing government debt crises and big downside risks. Meanwhile, the optimists are vilified.
Again, this is purely based on analyzing consensus (rather than economic facts) – historically, the best time to be an optimist has been when there were few optimists (e.g. early 1980s). The worst time to be an optimist was when there were many optimists (e.g. 2000).
I don’t think optimists are being vilified. Barons survey has 12 of 12 (!!) being bullish this year. That’s higher than 2000!
Who is being vilified are people who say we’re still in a secular bear market that started Oct ’07.
Interesting point. Most surveys I see show mixed results. Do you have a link to the Barrons survey?
Also, I think this brings up another point…the consensus in the institutional world is often different than the consensus in the retail world. So sometimes it’s a question of who the contrarians are being contrary to.