by Dan Steinhart, Casey Research:
Even the most steadfast bears are throwing in the towel.
In November, two famous and successful contrarian money managers—Jeremy Grantham and Hugh Hendry—capitulated. Both admitted that while soaring stock prices make no fundamental sense, betting against them is unwise.
They hopped on an already-overcrowded bandwagon: depending on which survey you consult, bullish sentiment is either at multiyear or all-time highs.
You don’t need me to tell you that such universal bullishness is a classic signal of a market top. When everyone’s a bull, there’s no one left to buy. Bullish sentiment last peaked in 2007, and before that in 2000, which tells you all you need to know about bullishness as an indicator.
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