Sentiment Surveys (and other stuff too)

For anybody who is serious about learning investing, I would recommend getting aquainted with sentiment surveys. There are a few major surveys that publish survey results each week regarding the opinions and actions of various investing groups. These data can then be quantified statistically and also compared to historical readings to make better judgements on your investments. Two common ways to look at these data are by looking at absolute levels on a percentage basis OR by looking at the data plotted within +/- standard deviation bands to help identify relative extremes and account for long-term trending in the data.

A typical survey will tell how many people are expecting further market declines, how many are expecting market gains, and often how many are neutral.

Investor's Intelligence is a survey that has been around a long time as far as these surveys go. It polls investment advisors. The results of this week's poll show, on an absolute basis, the most % of advisors expecting market declines since 1994 and one of the very highest levels since the 1970's. When advisors have gotten this pessimistic, it has typically coincided with market bottoms and good stock returns in the following months. It remains to be seen whether that will be the case this time.

With that being said, there are other polls that survey different investor populations, and these are not all in agreement currently. So I am not jumping the gun in expecting strong markets for many months to come.

As a side note/update, move the stop loss up on SRS to 100.00.

Also, as a follow up to my post on oil prices I wanted to give a short explanation of a couple oil ETFs.....

USO is the most directly correlating ETF to the price of crude oil.

DIG is a ultra oil and natural gas ETF. It price will depend on both of those commodities, which correlate strongly, but adds the complexity of two underlying markets. Also, the "ultra" means that it will be about twice the volatility as a non-ultra fund. So there is more risk and more reward potential.

Pete