November 18, 2014

The Markets

“Is all this stock market optimism a red flag?”

Contrarians – investors who bet against prevailing market trends – were probably nodding along as they read that headline in The Wall Street Journal back on January 18, 2013. The Journal cited the American Association of Individual Investor’s Sentiment Survey, which showed about 46 percent of participants were feeling bullish. As it turned out, the bulls were right.

Two weeks ago, the AAII Sentiment Survey showed investor pessimism at a nine-year low with just 15 percent of participants growling like bears. Well, last week, pessimism rebounded and optimism moved higher, too. The survey results were:

  • Bullish:   57.9 percent, up 5.2 percentage points from the prior week
  • Neutral:  22.8 percent, down 9.5 percentage points from the prior week
  • Bearish:  19.3 percent, up 4.3 percentage points from the prior week

The historic average for the survey is bullish 39.0 percent, neutral 30.5 percent, and bearish 30.5 percent. I find it interesting how balanced this sentiment appears to be with no overwhelming

So, since investor expectations are mixed, what will U.S. stock markets deliver? Since there is no way to know but in times like these, it’s good to have a well-diversified portfolio. Fortunately, this is exactly how I’ve currently set your accounts up.

The Machine Age

‘The New Hire’ is the name of a September survey published by PwC. It’s not about how to make newly-hired people more comfortable and productive. It’s about how the R generation – the latest iteration of industrial robots – is transforming manufacturing. More than one-half of the 120 manufacturing firms surveyed already have adopted robotics technologies. Auto manufacturers employ robots, as do food; consumer goods; life sciences, pharmaceutical, and biomedical; and metals companies.

PwC predicts the shift to robots will create new jobs for engineers specializing in robots and robotics operating systems. It also is likely to result in the displacement of a fair number of human workers. Currently there are about 1.5 million ‘intelligent industrial work assistants’ laboring around the world. About 230,000 are employed in the United States.

Last month, Popular Mechanics reported engineers have been working on mechanical first-responders, like bomb-defusing and investigator robots, to help with threats like Ebola and the Fukushima nuclear power plant disaster. The magazine found robots competing in the DARPA Robotics Challenge were more like toddlers and less like capable adults. “For a typical task in the event, turning a valve, a team of several people required an hour or more to prep the robot, and that same team had to stand at the ready to catch their bot when it stumbled (which happened often).”

Weekly Focus

“All the world’s a stage, and all the men and women merely players: they have their exits and their entrances; and one man in his time plays many parts, his acts being seven ages.”
-William Shakespeare, English playwright and poet

 Image taken by Morio, used in accordance with the Creative Commons Attribution ShareAlike 3.0 Unported license

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