Tuesday, January 19, 2010

Good Luck To Today's Bulls

Fresh off the wire:

Investors have rediscovered their risk appetite and are putting cash reserves to work across the equity markets, according to the BofA Merrill Lynch Survey of Fund Managers for January.

For the first time since January 2006 the survey shows investors are taking above average risk, relative to their benchmark. A net 2 percent is taking "higher than normal" risk, compared with a net 7 percent taking "below normal risk" in December. These figures follow several months of investors displaying optimism about the economy but maintaining a more cautious risk and investment profile.

Average cash balances have fallen to 3.4 percent, the lowest reading since mid 2007 and down significantly from 4.0 percent in December. Appetite for equities is strong. A net 52 percent of asset allocators are overweight equities, up sharply from a net 37 percent in December.

Fewer investors are protecting themselves against a fall in equities. A net 55 percent have no protection against a fall in the next three months, compared with a net 48 percent in December. Investors have been moving into cyclical stocks, are positive about profits and are urging management teams to invest in growth.

"This survey is one of the more bullish we have seen and suggests that investors buy into the idea that this recovery has legs," said Gary Baker, head of European Equities strategy at BofA Merrill Lynch Global Research. "We are, however, seeing early signs that might alert contrarians looking for a selling opportunity - namely low cash allocations and possible complacency against a sell off in stocks," said Michael Hartnett, chief Global Equities strategist at BofA Merrill Lynch Global Research.

I wonder how obscenely high Gary Baker's salary is? I mean the Moron just said that *bullishness* is *bullish*!

As I said in the title....good luck to these *latecomers*.

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