Loading ...In all my time studying markets, I can’t recall a single instance when the split between “pros” and “retail” has ever been higher.
Clashing views
This leaves us in an awkward position. The professionals are bearish and believe this rally should be sold.
Yet retail is hoovering up stocks like a brand-spanking-new triple-action model with the red trim and all the options.
In the old days it would make sense to go with the professionals – after all they do this for a living.
But in this age of limited alpha, I believe the choice is not nearly as clear.
Ironically, the weak hands are no longer retail and they are not nearly as “dumb” as Wall Street believes. Retail investors don’t have the pressure of monthly return comparisons. They don’t have consultants threatening to pull money at the first sign of underperformamce.
This might sound absurd, but I would rather be on the side of retail. I know that would mean buying stocks up here at plus 25%.