Market letter sentiment
by Arthur Merrill
Analyst Abraham Cohen, many years ago, began to tabulate the opinions of stock market analysts. He
watched scores of market letters (including my own!) and each week put them in three piles: bullish,
bearish and correction. He reported the percentage in each category in his weekly publication, Investors'
Intelligence. I have found it useful to divide the "correction" pile and assign one half of the stack to the
bullish and one half to the bearish categories.
Market letter writers are presumed to be experts and to have access to more data than the ordinary
investor. The advisor should be able to predict the future of the market more accurately than the advisee.
Surprisingly, Cohen's tabulation technique shows this is not the case. You would have done better
through the years if you had sold when the market letter writers were optimistic, and bought when they
were pessimistic. Contrary opinion!