Foreign Investors as a Contrarian Indicator
From the WSJ:
"If you did the opposite of what the European investors did in the past few years, you would have made a lot of money," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. "When we were beginning the recession, nobody believed it because the trend had been up for so long. Now, with the bad-news trend so entrenched, with the recovery here, nobody believes it. There's an error in pessimism here."
Of course, there is more going on than just the end of the recession and why doesn't the stock market realize it. As a commentar in today's NYT business section puts it, the global situation is as perilous now -- due to Pakistan, the Mideast and Terrorism threats -- as its been since the Cuban missle crisis. The prospective imminence of the end of the world has a way of playing with your investing horizen.
But still, the trend seems to be positive in all directions. Good breaking news this weekend -- from India -- about Pakistani progress in slowing or halting militant incursions, Sharon is in DC (so we can expect a bombing as he sits down with Bush tomorrow, just like the last visit) and a positive proposal for a Palestinian Home State timeline seems to be imminent from the administration. I think the trend is positive.
11:13:19 AM 
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