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Global investors the most bullish in three years, is that not reason enough to be fearful?

Posted on 23 January 2013 with 1 comment from readers

Plenty for the beautiful Sara Eisen to be cheerful about in reviewing the most bullish survey of global investment sentiment in three years. She speaks on Bloomberg Television’s ‘Money Moves.’ The VIX fear index is also tracking multi-year lows.

However, we recall Warren Buffett’s advice ‘To be greedy when others are fearful and fearful when others are bullish’ or words to that effect. His impeccable investment logic is that when people are most bullish then the good news is all in the market and there is only downside to come, though admittedly this Bloomberg survey was not exactly short of possible future problems.

We also note that over the past three years the euro zone crisis has come and gone in waves and the same could be said of US fiscal problems. Perhaps we are just in a soft patch again at the moment…

Posted on 23 January 2013 Categories: Banking & Finance, Bond Markets, GCC Stock Markets, Global Economics, Hedge Funds, Investment Gurus, Private Equity, Sovereign Wealth Funds, US Stocks, Video Channel

1 Comment posted by readers:

Comment by John Mark - 23 January 2013

I turn again and again to your articles for encouragement – encouragement that things are as bad as I personally believe they are.

Maybe I want things to be bad, as bad as possible, because I’m a misanthropist but, more likely, it is that the various journalists of the world never seem to include in their prognostications the deteriorating state of our currencies.

I find currency exchange difficult to get a grip on so that I tend to ignore it. Perhaps, similarly, others find the value of currency and how and why it is changing difficult to grasp or just boring.

But it seems to me that however well shares are predicted to do or however successfully growth is occurring with falling unemployment, however optimistic pundits are, the whole edifice is built on the sand of currencies losing value month by month.

If goods, commodities, manufactures and services are considered to be picking up, even blossoming, yet the currencies, in which those exchanges are taking place, are losing their intrinsic values, aren’t the exchanges losing value as well?

Where, then, optimism?

Sare Eisen seems to make the stock market’s share value optimisim seem equal in economic importance to the US debt ceiling crisis coming up within a month or two. But the US debt is structural and the market’s optimism is like a mist, which appears for the moment and then vanishes, as the sun of QE drives it away.

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