6 replies to this topic

[SemiBizz]

[airedale88]

so..., some sentiment reads, contrary or not, are good, but others are not? interesting. it would not have anything to do with one's market bias as to which are good i guess.

[SemiBizz]

Yes, there is a difference in the parties behind INVESTOR sentiment and CONSUMER sentiment. Nearly all investors are consumers... but not all consumers are investors... I hope that helps.

Edited by SemiBizz, 25 September 2007 - 11:46 AM.

[Remo]

Replying to Consumer Sentiment - not a contrarian play

Why not? Why guess the outcome, when there's researched information available:

Consumer Confidence and Stock Returns

MEIR STATMAN
Santa Clara University - Department of Finance
KENNETH L. FISHER
Fisher Investments, Inc. August 2002

Santa Clara University Dept. of Finance Working Paper No. 02-02

Abstract:
Financial advisors who worked to restrain exuberant investors in the late 1990s, worked equally hard to lift desperate investors in the early 2000s. Will lower stock prices sap the confidence of consumers? Will lower consumer confidence extinguish all hope for investors?

We study the consumer confidence measures of the Conference Board and the University of Michigan and the investor sentiment measures of the American Association of Individual Investors and Investor's Intelligence. We find that consumers grow confident when investors grow bullish. Consumer confidence declines when stock prices decline but investors need not fear that declines in consumer confidence would be followed by low stocks returns. Low consumer confidence is followed by high stock returns more often than it is followed by low stock returns.

Keywords: Behavioral Finance, forecasting, tactical asset allocation, investor sentiment

JEL Classifications: G10, G14

Working Paper Series

Consumer Confidence and Stock Returns

[airedale88]

i think watching investors is the better bet. when consumers stop getting in line to buy Apple's latest gizmo, Halo 3 and other toys, i'll pay more attention.

[SemiBizz]

Why not? Why guess the outcome, when there's researched information available.

All I have to do is read the chart. Works for me.

[DonBart]

Conference Board Consumer Confidence Poll: All Time High Confidence Reading: January 2000 All Time Low Confidence Reading: March 2003 Clearly this poll is not a contrary indicator for future stock market returns