We’ve been hearing for years now how this is supposedly, “the most hated bull market in Wall Street history.” In fact, it’s become such a popular meme that even USA Today picked it up this week and ran with it. The trouble is there is absolutely no evidence at all to support this idea.
In fact, all the sentiment studies I look at suggest this has been one of the most beloved stock markets in Wall Street history. The Investors’ Intelligence survey is just coming off its longest sustained period of extreme bullishness ever recorded. Chart via Yardeni.com
Surveys are fine but I prefer to look at what investors are actually doing with their money. Confirming the extreme bullishness in the II survey is mutual fund cash levels, which recently hit an all-time low as a percent of total assets.
Chart via SentimenTrader.com
Another record-breaking extreme in bullishness witnessed recently can be seen in the positioning of traders in the Rydex family of mutual funds.
Beyond this small group of mutual funds, we can also look at total household assets as reported by the Fed. There has never been a time in history when investors have allocated as much money to stocks relative to cash as they have today.
Furthermore, investors aren’t just allocating a massive amount of money to stocks, they are borrowing money from their brokers to buy even more, and doing so in record amounts.
Even when you adjust margin debt for the growth in the overall economy, it recently hit an all-time record high. (And, btw, this doesn’t bode well for the, “bull market.”)
It may be hard to believe but the fact is every one of these measures shows more euphoria among investors than any other time in at least a generation or two, including the dotcom bubble. So if you could stop calling this, “the most hated bull market in history,” that’d be great.