I’m actually not talking about your improved deep sleep patterns since the election ended. I’m instead referring to the band R.E.M. and one of their songs, “Shiny Happy People”. The songs meaning refers back to a propaganda poster the band saw while touring China. The translation of the poster and future lyrics of “shiny happy people holding hands” is ironic in the fact that the hundreds of Chinese students killed in Tiananmen square was still fresh in everyone’s mind. Micheal Stipe, the lead singer, hated the bubble-gum pop nature of the song which led the band to never play the song in concert.
Lately, I feel that we are being fed some serious propaganda from financial news outlets which is driving stock indices to unjustified new highs. S&P 500 earnings have barely moved but supposedly we should have no worries as all pro-growth Trump policies will fly through and become adopted. Who knows how things will actually turn out but I do know to pay attention to my contrarian sentiment model which has recently turned cautious (-7) just as everybody feels hopeful.
Zeroing in on just one of the 4 indicators that that go into our model, the AAII bullish sentiment jumped to the 13th biggest gain in the survey’s 29 year history in November. The average 6-month gain for the S&P 500 following the 12 other bigger bullish gains was a measly .3%.