Loading ...
Sorry, an error occurred while loading the content.

Optimism & Investor expectation of stock market returns

Expand Messages
  • Allan Roth
    Somewhere recently, I think I heard that the average US investor now believes the US stock market will return 15% annually, down from something like 30%
    Message 1 of 37 , Sep 20, 2004
    View Source
    • 0 Attachment

      Somewhere recently, I think I heard that the average US investor now believes the US stock market will return 15% annually, down from something like 30% annually in 2000.   Has anyone seen such surveys and can tell me where I might look?

       

      Thanks very much, and best regards.

       

       

      Allan S. Roth

      WEALTH LOGIC, LLC

      102 South Tejon Street, Suite 800

      Colorado Springs, CO 80903

      Tel 719-955-1001 /  Fax 719-260-7904

      Email:  ar@...

      Web Site   www.DareToBeDull.com

       

      Unemotional, Superior Investing!

       


      From: A.C.B. [mailto:ballasac@...]
      Sent: Monday, September 20, 2004 6:53 AM
      To: Behavioral-Finance@yahoogroups.com
      Subject: Re: [Behavioral-Finance] Re: herding in Oil prices and Stock market reaction

       

      I find the degree of participation in the oil market of particular interest.  The ease of entry into the market associated with higher incomes and a greater  supply of information(cost of info declining), as well  as the relative scarcity of this exchaustible monopolistic resource produced an optimistic outlook. .  Buy now, prices will be higher in both the short and the long run.

       

      Question: What do you think?

       

      Regards,

       

      A. Ballas

      deepfoobar <deepfoobar@...> wrote:

      The volumes in products (commodities of all kinds) are up rather dramatically this
      year. One colleague in the pits (NYC) claims hedge funds have boosted volumes 35%
      this year in sugar alone, and some of the larger funds are taking physical delivery.
      Not normal hedge fund or speculator behavior!

      One explanation is certainly leverage and the attractiveness of being in 90% cash
      against a position. Another is the interest in mini futures which now allow cheaper
      entry and round pairing with options which reduces transaction cost. For example on
      the large futes one might have to buy 5 options contracts to hedge. With a mini it's
      one-to-one.

      I think if one pokes around you'll see interest up even in CRB Index products, a sure
      sign the shooters are serious about this game.

      As to herding there should be no doubt when there are some 8,000 plus hedge funds
      the commodity in shortest supply will be unique ideas.

      FWIW.



      --- In Behavioral-Finance@yahoogroups.com , "Erik Kobayashi-Solomon" <erik@t...>
      wrote:
      > Hi,
      >
      > Sorry for another message, but after posting the last, I saw an interesting
      > blurb regarding all of this...  It follows:
      >
      > ===
      > Reuters reports that pension funds and other long-term investors are playing
      > a far greater role in this year's oil surge than previously thought as they
      > plough cash into outperforming commodity markets, traders and analysts said
      > on Monday.
      >
      > A sustained push into oil markets by long-term buy-and-hold investment funds
      > has helped push prices to record peaks near $50 a barrel.
      >
      > And the holdings of big-money vehicles like pension funds may be even bigger
      > than thought. Part of their activity is being masked by their use of
      > intermediaries such as oil traders or big banks, which are classified
      > differently in regulatory data.
      >
      > What the funds do next will be a deciding factor in just how high oil prices
      > get, analysts said.
      >
      > ===
      >
      > All the best,
      >
      > erik...
      >
      >
      > **********NOTE**********
      > The information contained in this e-mail message is intended only for use of
      > the individual or entity named above.  If the reader of this message is not
      > the intended recipient, or the employee or agent responsible to deliver it
      > to the intended recipient, you are hereby notified that any dissemination,
      > distribution or copying of this communication is strictly prohibited.  If
      > you have received this communication in error, please notify us immediately
      > by telephone (732.878.2275), and destroy the original message.  Thank you.
      >
      >   -----Original Message-----
      >   From: Erik Kobayashi-Solomon [mailto:erik@t...]
      >   Sent: Tuesday, August 24, 2004 9:39 AM
      >   To: Behavioral-Finance@yahoogroups.com
      >   Subject: RE: [Behavioral-Finance] herding in Oil prices and Stock market
      > reaction
      >
      >
      >   Hi Alif,
      >
      >   Thanks to the reference to the paper -- I'll have a look.  Regarding what
      > the increase in trading volumes might imply, I think it is the same sort of
      > phenomenon as the stock market (i.e., fallible human beings full of fear and
      > greed attempting to make money without 'doing' anything).  In the US stock
      > market, the average holding time for an equity is something like six
      > months -- ridiculously short if one thinks of holding a stock as being an
      > owner of a company (of course, whether owning stock makes one an owner of a
      > company in the real sense of the phrase is debatable as well...).  I don't
      > know much about the crude oil market, but it seems like people have seen
      > that the Paul Tudor Joneses of the world can make money 'effortlessly' by
      > speculating in oil futures and that it is also relatively cheap to do so
      > (this must be considered to some sort of herding as well, I would guess...).
      > Tough to imagine that as the oil market grows in depth there would be the
      > opportunity for a few investors to significantly alter price discovery in
      > even the medium term...then again, I've never traded that market and haven't
      > done much studying about it either...
      >
      >   All the best,
      >   erik...
      >
      >   **********NOTE**********
      >   The information contained in this e-mail message is intended only for use
      > of the individual or entity named above.  If the reader of this message is
      > not the intended recipient, or the employee or agent responsible to deliver
      > it to the intended recipient, you are hereby notified that any
      > dissemination, distribution or copying of this communication is strictly
      > prohibited.  If you have received this communication in error, please notify
      > us immediately by telephone (732.878.2275), and destroy the original
      > message.  Thank you.
      >
      >     -----Original Message-----
      >     From: Alif Shirali [mailto:alifshirali@y...]
      >     Sent: Tuesday, August 24, 2004 1:51 AM
      >     To: Behavioral-Finance@yahoogroups.com
      >     Subject: [Behavioral-Finance] herding in Oil prices and Stock market
      > reaction
      >
      >
      >
      >     Hi again,
      >
      >     On herding effects and market structure issues,
      >     Simmons & Co of Houston (claims to be the top
      >     investment bank specializing in energy) put out
      >     several papers in the mid-90s about how a relatively
      >     few moderate size positions by hedge funds in effect
      >     hijack the whole price discovery process on the
      >     world's largest physical commodity, oil. The papers
      >     could probably be found on their site,
      >     www.simmonsco-intl.com.
      >
      >     The legendary trader (sorry for the cliche) Paul Tudor
      >     Jones pointed out last year in a talk at the NYMEX
      >     (world's largest energy exchange) that in the last 20
      >     years the total oil production has increased 50% but
      >     the oil trading volume on exchanges such as NYMEX has
      >     gone up TWENTY TIMES. Any suggestions on what that
      >     might imply?
      >
      >     Best,
      >     Alif Shirali
      >
      >
      >     --- Erik Kobayashi-Solomon <erik@t...> wrote:
      >
      >     > 3)  Could have had something to do with herding
      >     > effects in a thin market
      >     > (I'm not an expert in the subject of herding, so
      >     > maybe one of my learned
      >     > colleagues can explain this (or refute it) more
      >     > eloquently...).  It's
      >     > psychologically easier to buy something if the
      >     > people around you are saying
      >     > that the price is a bargain (a fact known by
      >     > hucksters and their 'straight'
      >     > partners the world over...), and especially in a
      >     > thin market, there could be
      >     > some self-sustaining exacerbation of this effect I
      >     > should think.
      >     >
      >
      >
      >
      >     _______________________________
      >     Do you Yahoo!?
      >     Win 1 of 4,000 free domain names from Yahoo! Enter now.
      >     http://promotions.yahoo.com/goldrush
      >
      >
      >     you may unsubscribe by sending an email to
      >
      >     Behavioral-Finance-unsubscribe@yahoogroups.com
      >
      >
      >
      >
      >
      >     you may unsubscribe by sending an email to
      >
      >     Behavioral-Finance-unsubscribe@yahoogroups.com
      >
      >
      >
      >           Yahoo! Groups Sponsor
      >                 ADVERTISEMENT
      >
      >
      >
      >
      >
      >
      ------------------------------------------------------------------------
      ----
      >     Yahoo! Groups Links
      >
      >       a.. To visit your group on the web, go to:
      >       http://groups.yahoo.com/group/Behavioral-Finance/
      >
      >       b.. To unsubscribe from this group, send an email to:
      >       Behavioral-Finance-unsubscribe@yahoogroups.com
      >
      >       c.. Your use of Yahoo! Groups is subject to the Yahoo! Terms of
      > Service.



      you may unsubscribe by sending an email to

      Behavioral-Finance-unsubscribe@yahoogroups.com




      you may unsubscribe by sending an email to

      Behavioral-Finance-unsubscribe@yahoogroups.com




    • deepfoobar
      There is one clear distinction when discussing bubbles and oil in the current context. First, oil may not be in a classic bubble where the only determinant
      Message 37 of 37 , Sep 27, 2004
      View Source
      • 0 Attachment
        There is one clear distinction when discussing bubbles and oil in the
        current context.

        First, oil may not be in a "classic" bubble where the only determinant
        of what one should pay is what one thinks they can get away with in
        selling to another tomorrow (greater fool). People really use oil for
        real things in the real economy. It has definite utility and value
        unlike tulips or internet stocks of yore.

        What we can observe about prices is that they have exceeded prior
        expectations for a top (40s) by a good measure. It may still stretch
        from here short term.

        Commodities however are self-correcting as I've stated. Just as
        production cost provides some real cushion on the downside, the
        absence of utility provides a ceiling.

        As to supply, Petrologistics today announced that output is at a
        record historically - 30.5mm bpd. True, supply is being constrained
        geopolitcally (Nigeria now, less so Iraq at least today since
        production and pipelines are reported back up to full levels) and by
        weather. Weather at least is a transient factor but a far greater one
        than geopol has been all year. One does have to wonder whether a glut
        might develop instead of shortages.
      Your message has been successfully submitted and would be delivered to recipients shortly.