The recent report by the Commodity Futures Trading Commission (CFTC), shows that the professional investors have continued to bet on falling Dow Jones “short” as private investors are starting to bet heavily on rising prices ( “Long”). Professional investors remain suspicious of a further rise in the US stock market. The private investors’ view is exactly the opposite. The question is; Who will be right? There have been plenty of times that the professional is dead wrong and the average person on the street has actually outperformed the professionals. Reuters reported that 69% of hedge fund investors expected the second half of 2017 to be worse than the first half. So why are the professionals so pessimistic? When you live and breath the market every single day, it is hard to get a grip on vertical markets. The professionals, more so that even the average street investor, tends to do worse in such markets because it makes them uncomfortable. Then there is the self-gratifying notion that the market is over when the retail invest comes in. But they tend not to look at the fact that there is a huge difference between the average retail investor and the person who has never invested who rushes in to join the party at the top simply be WHERE everybody else if there.
We have four actual groups:
1.smart strategic big money (long-term portfolios)
2.professional short-term traders
3.the day trader who thinks he is limiting his risks
4.program traders who try to arbitrage ticks
5.the average retail investor
6.the fool who rushes in at the last minute
In most real good vertical markets, it is the professional short-term traders who keep trying to sell the new highs. This has been the group that has been bearish ever since 2009. They never saw new highs coming, and they still will try to sell every new high today. They falsely believe that they are “professional” and so they will be right and the average investor is the fool. But the average investor sees the trend for what it is, goes with the trend, while the short-term “professional” keeps trying to beat the market.
1.smart strategic big money (long-term portfolios)
2.professional short-term traders
3.the day trader who thinks he is limiting his risks
4.program traders who try to arbitrage ticks
5.the average retail investor
6.the fool who rushes in at the last minute
In most real good vertical markets, it is the professional short-term traders who keep trying to sell the new highs. This has been the group that has been bearish ever since 2009. They never saw new highs coming, and they still will try to sell every new high today. They falsely believe that they are “professional” and so they will be right and the average investor is the fool. But the average investor sees the trend for what it is, goes with the trend, while the short-term “professional” keeps trying to beat the market.
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