Out Fox The $treet

It appears that this market can't even pull bulls along kicking and screaming. New report from Mark Hulbert (the expert on contrarian sentiment data from newlettes) shows that most advisors continue to doubt this rally. Appears that short term market timers are only recommending 22% of clients equity portfolios towards domestic stocks. That's down from 52% around the market top back in early May. While this is a short term 1-3 month indicator, it does show that advisors remain a lot more bearish then one would think considering the market rally during September. Clearly most advisors now worry about a October sell of and so the only path might be up. Consider the average recommended domestic equity exposure among a subset of the shortest-term stock market timers monitored by the Hulbert Financial Digest (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). This average currently stands at 22.1%, which means that the average short-term market timer is recom...

Our Net Payout Yield Portfolio has always maintained that stock buybacks play a bullish story and lead to outsized returns. That portfolio has beaten the SP500 by nearly 5% per year since starting in 2007. Too many investors focus squarely on dividends which are double taxed and provide very little flexibility for the corporation. Its increasingly common for a company to pay a 4% dividend and buyback 2% of stock. The combined yield would be 6%. Isn't that better then just a 4% dividend alone or even a 5% dividend? If you need the cash, why pay take some profits on the larger gains. Mark Hulbert reported that buybacks are starting to tell a bullish story for the market. Unlike in 2008 when corporations dramatically reigned in buybacks in order to conserve cash, this time they are starting to announce some serious increases over last year. Corporations are flush with cash just like in 2009 but now they are choosing to move forward with repurchases. Most investors say they would rat...

After the last week or so in the market and todays 1% drubbing, its difficult to remain overly bullish. Just about everybody claims the market is ready for a sizeable pullback and the drops in the SP500 in 5 of the last 7 days seems to bolster those thoughts. According to the recent report from Mark Hulbert, the evidence suggests that the market remains too bearish for a big correction. Hulbert has long been a tracker of the sentiment in the financial newsletter circuit. When this group gets too bearish, the market typically rallies as it did in Mar/April until. After such a long rally the market tends to get too bullish and hence a correction happens. Oddly and maybe not really that oddly, the average newsletter is more bearish now then it was in April. Everybody continues to expect the correction that won't happen as long as everybody expects it. After big recessions and bearish markets there has been a tendency towards long rallies without a 10% correction. Based on the Leading...