The dumb money vs smart money (Where are we now)-ZengJP

When market is like this, it is hardto be bullish. There are lots of bad news out there. Market is not atthe bottom yet. We likely to see two more weeks of down side or evenmore. However, at this time, opportunities are calling. This is theplace to separate the dumb money and smart money. Let's see where weare now. The Dumb Money: Current AAII Bullish/Bearish Sentiment: Since the advent of this survey in 1987, this indicator has reached the200% level 23 times in its history. Twelve months after a reading of200%, the market has averaged a gain of 21.75% with NO INSTANCES OF DECLINE. We are currently at 218%. Likely to go even further. ARMS-10 Days Moving Average: Four Occurrences of one day reading > 3.00: 10/19/1987, 3/10/2003, 3/22/2004, 1/2008 The Smart Money: The insider buy/sell ratio Anytime this indicator has crossed above 25%, the stock market was up22% over the next 12 months on average. We are near 40% now. IBES Valuation Model: This model shows the valuation of S&P500companies compare to bonds. S&P shows 50.7% undervalued than bondsnow. Twelve months after the 2002 lows, the market was up more than 30% andup more than 40% from the March 2003 lows over the next 12 months. With all these data in mind, you still need a strong stomach to bebullish. You still need faith that stock market will give you average10% return over next 50 years. If you don't believe in this, you got tobelieve in something because we are still human. No matter what you do,don't just listen to media, newspaper, analysts, etc. Include me. Doyou research, read books, analyst history, have something you canreally hold on to. If you want to make money in stock market, you needto do a whole lot more than you are doing now. Simply repeat bearishopinions will not help you in any measures.