Tuesday, January 10, 2012 at 12:15PM
The Yale School of Management has been conducting its own market sentiment surveys for some time now. One of its surveys is the Crash Confidence Index, which asks both individual and institutional investors how confident they are that there will not be a stock market crash in the next six months. Recent results from the survey show just how worried investors recently became.
As shown below, early 2009 marked the low point in the Crash Confidence index for both individual and institutional investors. That was the point where the least number of investors were confident that there wouldn’t be a stock market crash in the next six months. Early 2009 was also when the market ultimately made its financial crisis low, so just when investors became the most fearful of a crash, the market was about to turn a corner and head significantly higher.
Read the rest of the excellent Bespoke piece here.
Thanks for finding this, it’s been a long time since I checked it. It’s a pretty solid bullish indication, but I went to look at the other confidence plots (all of these are originally from Prof. Shiller) and they just seem to be meandering around.
Where did you get the other confidence plots? I went to the source cite (Yale) but didn’t see them.
Go to the data tab on the left, then select stock market confidence indices, then United States (they have Japan also).
If you’re interested in this stuff, Shiller has a chaper in his book (Irrational Exuberance) that has a good explanation.
Thanks Bozo- I’ve actually got the book. Started it, never finished it. I think I’ll dust it off this weekend and take a look at those confidence indices. Thanks again!
After MF Global, I’ve lost trust in brokers and their regulators. I’m pulling my long term assets out of the brokerages.