The Most (Not) Hated Bull Market

I look forward to reading Leuthold’s Green Book every month and the most recent one was great.

I asked permission to share the following study as I thought it was revealing.  They looked at sentiment levels as published by Investor’s Intelligence – specifically they averaged all of the values for each year to get a yearly reading. Below is a chart of the values.


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But does sentiment help with stock market returns?  Below are the 10 highest and lowest sentiment years and the returns of the stock market the following year.  Not surprisingly high sentiment results in low returns of 0.1% per year.  Low sentiment results in whopping 17.4% returns per year.  What was average sentiment in 2014?   2014 was the second highest value ever at 76.3%


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