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The bar before the last one was for 10-10-02, the last bar is for 11-29-02, in case you can't read it.
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From 1969 until November of 2000, there was a TV channel here in Southern California (KWHY-22) that was the first one -in 1969- to provide all day stock market and business coverage, in fact it was the first one to use a live ticker on the air. The channel was bought out by Telemundo in November of 2000, and all programming was converted to Spanish, thus eliminating the stock market coverage. Anyway, during 30 years of coverage, station had established a large list of regular guests from all over the country. Our firm, in addition to managing assets for offshore investors- is a research shop. We do all kinds of technical and econometric research, for our own use, as well as, for the use of other institutions. In fact our firm provided around the clock technical analysis for the channel in its last days. In late 1994 we were commissioned to develop a sentiment indicator based upon the market views of the guests who appeared regularly on KWHY. We started out without any pre-conceived ideas, we decided to just collect the data, and let the data tell us what kind of an indicator we could designed (confirming, or, contrarian) For the next three years 1995, 1996 and 1997, we listened, examined and archived, everything that was said by every regular guest. By 1998 we were able to come up with two lists of guests. One was a list with guests who between 1995 to 1997 they were consistently wrong in their market prognostications, (meaning they were wrong over 60% of the time) the other, was a list of guests who in the same period, were consistently right in their market prognostications (meaning they were correct over 60% in their market prognostications) We decided to use the second one, as a confirming indicator, and thus we proceeded to test the indicator over the next two years. The list included some very well known names, such as the late Bill Meehan, Ralph Block, Gerald Appel, Sherman McClellan, Art Hogan, Larry McMillan, Bernie Schaffer, Dick Russell, and Dick Arms among others. The list was originally made up by 38 guests, and it pretty much remained intact until November of 2000. When the program went of the air, we could no longer track the views of all these people. However, I personally knew about two thirds of them, so, we revived the indicator in January of 2001, from input from those who we knew, plus a few others who we are able to track thru other means (internet, newsletters) The current list has input from 49 individuals. However, here is the fascinating part. In late 1999 and early 2000, we observed something that got our attention: until then, the views expressed by all these people were pretty much in tandem, however, between late 1999 and early 2000, those who were older got increasingly bearish, while the younger ones got increasingly bullish! The difference was so noticeable, that we started to track the indicator by age group. We divided them in three groups, 30-45( blue bars) 45-60 (red bars) and over 60 (yellow bars) The two charts above, show NASDAQ at turning points over the past three years, and the sentiment of each group at that point in time. Remarkably, as NASDAQ plunged the older group got more bearish, while the younger group remained bullish, and the group in the middle stayed bullish to neutral.
We must caution against making too much of this for the following reasons:
a) Both the original list, and the current list, are small (38 and 49 individuals respectively) thus the sample is probably too small to have statistical significance.
We never actually asked anybody how old they were! We took a guess, so, there may be some inaccuracies, due to the fact that some could belong to another age group. Given the small size of the sample, it can make difference in the final calculations.Marketviews
MultiQuote
Posted 10 December 2002 - 11:57 AM
