Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Is 'Dumb Money' the New 'Smart Money'?

By Thomas HayesMarket OverviewAug 03, 2023 10:35AM ET
www.investing.com/analysis/dumb-money-is-the-new-smart-money-stock-market-and-sentiment-results-200640639
Is 'Dumb Money' the New 'Smart Money'?
By Thomas Hayes   |  Aug 03, 2023 10:35AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
HK50
-0.43%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
JPM
+0.79%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
BABA
-0.75%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
PYPL
+0.15%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Fox Business

On Tuesday I joined Charles Payne on Fox Business’ Making Money with Charles Payne. Thanks to Kayla Arestivo, Nick Palazzo and Charles for having me on the show. In this segment, we talked about how the “dumb money” has been right and the “smart money” has been wrong this year and in recent preceding years. We also covered the playbook for the second half of the year and how to deal with short-term seasonal volatility:

This is the chart that shows you how retail investors have been right in 2016, 2020 and 2023 and institutions had/have to play “catch up”:

Global Institutions Bearish, US Individuals Bullish
Global Institutions Bearish, US Individuals Bullish

Bears thaw on equities for the 2nd consecutive month
Bears thaw on equities for the 2nd consecutive month

We also gave an update on Alibaba (NYSE:BABA), but didn’t have time to go into these updated charts:

Alibaba P/E:

Alibaba
Alibaba

Hang Seng relative to MSCI ACWI:

Hang Seng relative to MSCI ACWI
Hang Seng relative to MSCI ACWI

Hang Seng P/E:

Hang Seng
Hang Seng

Hang Seng's Rally
Hang Seng's Rally

h/t Rick C. & Ben H. for helping with these.

And lastly, we were prepared to put out a new pick (Disney) but ran short on time:

Walt Disney Co
isney Co

From “Show Notes”

NEW “HATED” PICK: DISNEY

-Rare opportunity to buy highest quality asset while in the “bargain bin.” Fell 68% during 200-2002 recession, 57% during GFC, 56.47% since 2021. 3rd chance to buy world-class franchise at ½ off. Never make an investment decision based on politics. You snooze, you loose.

-Spend at parks up 40% over 2019 levels.

-Iger sticking around long enough to right the ship.

-Just brought in 2 former “heir apparent(s)” (Kevin Mayer and Tom Staggs) to fix linear TV issues.

–34% EPS growth next year. 21.26% 5yr expected growth rate.

-Benefit once in 100 year weakness. China parks coming back strong. Cost cutting with a machete (Marvel/Star Wars spends).

-Unrivaled global content library and parks.

-We think this stock can be up 50-100% over the next 24-36 months.

Catalysts:

Near term catalysts include: (1) additional updates on the strategic outlook for DIS with a very positive message likely at the Analyst event in September, (2) continued robust theme park demand and (3) sports betting optionality at ESPN (4) Dividend could return by eoy (5) Possibly bundle Hulu/Dis+/ESPN

Debt Downgrade

I’ll save us a ton of time on AMA questions tonight! In this important segment on CNA Asia last night I covered the US Debt Downgrade in detail (and implications moving forward). Hint: It’s not what you think! In fact, it may be the OPPOSITE!

Thanks to Thanks to Olivia Marzuki, Elizabeth Anne Neo, and MARIANNE STAR INACAY for having me on CNA to discuss Debt Downgrade, Stock Market, Outlook:

If you didn’t pick it up in the interview, listen again. The timing of the downgrade is uncanny…

PayPal (NASDAQ:PYPL) Update

We originally discussed Paypal publicly on Yahoo! Finance on June 15:

Cooper Standard

Reports earnings tonight and presents at JP Morgan (NYSE:JPM) Auto Conference next Thursday (August 10) at 8am. Details here.

Now onto the shorter term view for the General Market:

In this week’s AAII Sentiment Survey result, Bullish Percent (Video Explanation) rose to 49% from 44.9% the previous week. Bearish Percent dropped to 21.3% from 24.1%. The retail investor is still optimistic. This can stay elevated for some time based on positioning coming into these levels, but it would not surprise us to see a little seasonal give-back in coming weeks.

S&P 500 - Seasonality
S&P 500 - Seasonality

Keep in mind, institutional investors are nowhere near fully invested yet, so there will be a persistent bid on any bumpy pullbacks through year-end.

Cash level up to 5.3% from 5.1%
Cash level up to 5.3% from 5.1%

Whatlevel of risk do you think you're currently taking ..
Whatlevel of risk do you think you're currently taking ..

Sentiment Survey Historical Data
Sentiment Survey Historical Data

AAII Bulls
AAII Bulls

The CNN “Fear and Greed” dropped from 80 last week to 67 this week. Sentiment cooled a bit this week. You can learn how this indicator is calculated and how it works here: (Video Explanation)

Fear & Greed Index
Fear & Greed Index

UN - CNN Fear and Greed Index
UN - CNN Fear and Greed Index

And finally, the NAAIM (National Association of Active Investment Managers Index) (Video Explanation) moved up to 101.02% this week from 99.05% equity exposure last week. Managers have been chasing the rally.

NAAIM Exposure Index
NAAIM Exposure Index

This content was originally published on Hedgefundtips.com.

Is 'Dumb Money' the New 'Smart Money'?
 

Related Articles

Is 'Dumb Money' the New 'Smart Money'?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Madinaa 90
Madinaa 90 Aug 06, 2023 4:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
heloo walcm
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email