CHARTS OF THE MONTH

Don’t be scared only two charts. I love those two because most of the analysts, investment banks, broker houses rather love to forecast and in most of the cases they are wrong. So as I mentioned earlier my mantra is going against the consensus and the mob. My ABC Rule - „Always be Contrarian” is working well. Therefore I don’t care about the smart institutions or trader’s forecasts. I am only using them to see the common sentiment in the market and do the opposite of that. Statiscally proven that the massive majority of forecasts for the future market movements are worthless, hopeless and totally wrong. Never listen to anyone. I have to tell you a secret – there are no gurus.

Day before yesterday Bloomberg posted those charts about the investors sentiment for 2014. Without these data – you can check back in my blog – I recommended to you to buy and hold gold, some commodities and the Bovespa, the brasilian index. And being underpositioned in the US markets. But frankly the Nasdaq and Russell still performing well in 2014.

These chart are confirming back my hypothesis.

The assets of commodities are so unpopular. The gold seems really heated. In my perception those are good news, if something is hated it doesn’t mean automatically it is bad instrument, it only means unpopular and there is huge buying power outside which could any time get into the market and push higher the prices.

The other chart is about the different equity markets and regions. Before I saw this chart I underpositioned myself in US equities and started to buy like an idiot the Bovespa, FTSE100 and Nikkei. That chart proves me that vast majority of investors are bullish on US market, that scares me. When everyone agrees something else bound to happen. This chart confirms my preconception that I made a good decision and I understood well the investor’s sentiment.

The BFM Assets Team.