Rational Investing with Irrational Pricing - Negative Sentiment is a Contrary Indicator


	Rational Investing with Irrational Pricing - Negative Sentiment is a Contrary Indicator

ashleystar

4-24-2007 9:49 AM

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tags:

stockmarket, investing, money, forwork, graph, finance, stocks

ashleystar says:

Profit from irrational exhuberance. It's easy and is profitable from the inevitable increasing upturns in the market.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://www.clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/e946ce28-85e4-4ac4-aca5-7d8e719a6ab7/3AFF7575-EA9D-42E0-98F3-E36042F627AD/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://usmarket.seekingalpha.com/article/33286?source=d_email&u=1996" href="http://usmarket.seekingalpha.com/article/33286?source=d_email&u=1996" style="font-size: 11px;">usmarket.seekingalpha.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://usmarket.seekingalpha.com/article/33286?source=d_email&u=1996">
<P>Representing the U.S., we have SPY (dark blue); Asia is represented by the 
Vanguard Pacific ETF [(<A title="More opinion and analysis of VPL" 
href="http://seekingalpha.com/by/symbol/vpl">VPL</A>); yellow]; Europe is the 
Vanguard European ETF [(<A title="More opinion and analysis of VGK" 
href="http://seekingalpha.com/by/symbol/vgk">VGK</A>); pink]; and emerging 
markets are the Vanguard Emerging Market ETF [(<A 
title="More opinion and analysis of VWO" 
href="http://seekingalpha.com/by/symbol/vwo">VWO</A>); light blue].</p> <P>Notice that Europe and the emerging markets were hammered the worst during 
the late February/early March selloff. </p> <P>Note also that they have become the performance leaders since that time. 
Indeed, at present, the U.S.--despite all-time Dow highs--is the world 
performance laggard.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://usmarket.seekingalpha.com/article/33286?source=d_email&u=1996"><P><STRONG>Panic takes everything down with it; the good with the bad.</STRONG> A powerful market strategy is to find good assets caught in the panicky downdraft and invest for the return of rational repricing. While it's true that markets can stay irrational longer than traders can stay solvent, it's also the case that prudent investors who wait for irrational pricings can put their solvency to good use by making longer-term bets on eventual market sanity. </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://usmarket.seekingalpha.com/article/33286?source=d_email&u=1996"><div align="center"><img src="http://content9.clipmarks.com/blog_cache/usmarket.seekingalpha.com/img/96E4BCB9-8B26-4F54-A28A-36DB3995170A" alt="example042307" /></div></blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/3AFF7575-EA9D-42E0-98F3-E36042F627AD/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>