The latest Merrill Lynch survey finds that fund managers are more bearish than any time in the past 7 years, says Paul Kedrosky. Paul wisely notes that this is the most bullish thing he’s heard in years.
(The theory behind contrarian indicators, by the way, is not that fund managers are stupid. It’s that they put their dollars where their mouths are. When they’re bullish, they’ve already bought–which means there’s less money available to drive prices higher. When they’re bearish, they’re sitting on the sidelines, which means there’s LOT of latent buying power).
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