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Are they selling bonds and buying stocks now?
Old 01-14-2013, 11:26 AM   #1
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Are they selling bonds and buying stocks now?

This data is from the Investment Company Institute's monthly cash inflows:



It appears the answer to my question is --- "No, not yet". If anything investors seem to be avoiding equities despite recent year's good returns.

We are nowhere near a blowoff stage (due to excess enthusiam) in equities. That is my take anyway.

Not to say we cannot have a bad stock market.
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Old 01-14-2013, 11:36 AM   #2
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Couple of articles at marketwatch this morning

Bill Gross is adding to treasuries

Gross Raises Holdings of Treasuries to Highest Level Since July - Bloomberg

Hoisington research latest report doesn't see interest rates or inflation rising

http://www.hoisingtonmgt.com/pdf/HIM...ail_rt_mc_body

I think hoisington has some good arguments , I don't see much inflation coming till jobs start ramping up.
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Old 01-14-2013, 11:39 AM   #3
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Explanation of the vertical axis (units) ?
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Old 01-14-2013, 11:57 AM   #4
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These questions are not as simple as they can seem. For example, there is no exchange where you can take your bonds and have them transformed into stocks. This can happen in a very limited way with convertible bonds. Mostly though bonds last until they are retied by the company involved, and almost always there are at least as many new bonds issued in a year as old bonds retired. The same is true of stocks. A few firms may be retiring more stock than they are issuing, but in aggregate, the amount of shares stays the same or increases, year in an year out. Someone owns each and every share. All that can change is who these holders are, and how avid is their desire to hold stocks or bonds, respectively.

Sometimes you hear strange statements like "nobody owns any stocks anymore." OK....

Recently I saw a count that gave the lie to the idea that invidiuals are selling out of the market. Individual are still the largest holders of common stock in America- not mutual funds, not index funds, not hedge funds-just regular Americans who over time have collected and inherited a lot of stock, and with luck we will always have an America where this is not only possible but common. I'm the 4th generation in my family to own some Exxon stock that has gone through a lot of transformations over the years, I think starting life as shares in Standard Oil Trust.

Ha
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Old 01-14-2013, 01:27 PM   #5
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Ha, you bring up some interesting points. The ICI numbers in that chart above are for mutual fund holders only. I am not sure if these numbers include ETF's.

The interpretation of the trends is probably tricky although in extremes I might expect the bonds %'s to be down and stocks %'s to be up. It would help if I had data going back to 2000 when the equity craze was in full swing.
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Old 01-14-2013, 01:34 PM   #6
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Why are people making such a big deal about a week's flow into equities? This could have been 401k allocation from bonus or re-balancing.
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Old 01-14-2013, 02:20 PM   #7
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Originally Posted by Lsbcal View Post
Ha, you bring up some interesting points. The ICI numbers in that chart above are for mutual fund holders only.
I see. I am sure people have been collecting and mining this kind of information and trying to do correlations with various lags to market performance for a long time. There may be useful information there; I really do not know.


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Old 01-14-2013, 02:48 PM   #8
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Quote:
Originally Posted by haha View Post
Sometimes you hear strange statements like "nobody owns any stocks anymore." OK....

Recently I saw a count that gave the lie to the idea that invidiuals are selling out of the market. Individual are still the largest holders of common stock in America- not mutual funds, not index funds, not hedge funds-just regular Americans who over time have collected and inherited a lot of stock, and with luck we will always have an America where this is not only possible but common. I'm the 4th generation in my family to own some Exxon stock that has gone through a lot of transformations over the years, I think starting life as shares in Standard Oil Trust.

Ha
Ha,
While XON currently has about 50% individual ownership, I believe the the percentage of overall Institutional Ownership is now closer to 70%. I would be interested in the article that stated Individuals were the largest holders. Here is an article that states "the proportion of equities managed by institutional investors hovered around five percent from 1900 to 1945. But after World War II, institutional ownership started to increase, reaching 67 percent by the end of 2010."
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Old 01-14-2013, 02:52 PM   #9
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Ha,
While XON currently has about 50% individual ownership, I believe the the percentage of overall Institutional Ownership is now closer to 70%. I would be interested in the article that stated Individuals were the largest holders. Here is an article that states "the proportion of equities managed by institutional investors hovered around five percent from 1900 to 1945. But after World War II, institutional ownership started to increase, reaching 67 percent by the end of 2010."
Wow, I guess I didn't pay very close attention. Thanks for correcting my mistake.

Ha
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