Extreme in investor pessimism could signal a bottom

Posted by: Aaron Pressman on July 20, 2006

Thanks to Charles Kirk’s blog this morning, I learned that the weekly sentiment poll by the American Association of Individual Investors has gotten to extremes. Only 23.85% of investors feel bullish, the lowest since April 2005. And a whopping 57.9% feel bearish, the highest since February 2003. Those were both good buying opportunities, especially February 2003 when the S&P traded intraday as low as 806 and finished the year at 1111. The April 2005 low was 1136 and the year-end close was 1248.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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