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July 20, 2006
Extreme in investor pessimism could signal a bottom
Thanks to Charles Kirk's blog this morning, I learned that the weekly sentiment poll by the American Association of Individual Investors has gotten to extremes. Only 23.85% of investors feel bullish, the lowest since April 2005. And a whopping 57.9% feel bearish, the highest since February 2003. Those were both good buying opportunities, especially February 2003 when the S&P traded intraday as low as 806 and finished the year at 1111. The April 2005 low was 1136 and the year-end close was 1248.
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