Investor Sentiment Shows Total Confusion

Investor Sentiment Shows Total Confusion

“Davidson” submits:

Gallup’s two sentiment polls are often in opposite directions. This seems to mirror the paradox of individual opinion that is seen so often during recoveries that individuals see the world as risky but their own situations as favorable.

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Individuals are isolated from what others are experiencing and therefore accept the media view as a substitute. This is even though what they see with their own eyes is positive.

The paradox view in which the world is perceived as being on the verge of collapse while I am OK is, I think, reflected in these 2 Gallup polls.

Capture568 605x420 The Individual Paradox.....Im OK But Everything Else Is Falling Apart

My 2 cents:

We can also see this phenomena in new car and home sales. While consumer sentiment continues to fall, we are seeing a hard rebound in both auto and home sales. At its basic level this means that while consumers are becoming LESS optimistic about the economy in general, they feel safe enough about their own circumstances to increasingly make large ticket purchases of illiquid assets (cars, homes).

This behavior contradicts their at least outward views….

By: valueplays

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.