Romanian Sentiment Review – Revisiting 30 billion euros

The Romanian capital markets were valued at 30 billion Euros in the best of times in July 2007. Then nobody wanted to believe crisis could come. When it came, the market found reasons and people to blame. The crisis came and washed value by 90% taking the valuation figure to 6 billion Euros. Again no one wanted to believe it can ever get over. What happened? Prices rose back to 20 billion today. Now how is the sentiment? “ Mukul when will they fall?” “Will they ever fall” “They will never fall” “Stupid surveys”.
The idea is that market will believe what the majority believes and the majority is always less rational. 20 billion Euros valuation now suggests that we have recovered nearly 60% of the losses from the top. This is no mean task. We are already 12 months in the rally. What happened from 8,000 to 30,000 BETFI caught many by surprise. Orpheus screamed Oct low, March low repeatedly, but lone voices are generally ridiculed and unheard. Perfection in forecasting does not exist. Now market breadth is falling for more than 6 months, making lower highs every time market goes up and sentiment readings for 6 month outlook are at all time highs.
This is what we said last time. “Selling in strength is as tough as buying at a bottom. They both involve high skill, individuality and ability to identify low risk entry and profitable exits. The top we are speaking about should occur anytime from early Feb to late Feb.”.
Now we are in early Feb. The only disconnect now is that short term monthly sentiment readings are still falling while long term 6 monthly readings continue to rule at all time highs. We will give it another few weeks. After that the surprise should restart. Faster you learn to disconnect from the mass sentiment, the better you can create wealth for yourself and your clients.
Enjoy the latest Romanian Sentiment Review.
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A Sentiment Index reading can assist to measure these extremities in mood and potential market turns. Survey respondents will not only benefit from the interpretation and indicator readings but also will be invited for regular training seminars on sentiment indicators and provided relevant literature. Orpheus Capitals and Prognosis.ro are two independent research companies publishing the Romanian Sentiment Review. RSR is a sentiment index based on the survey of market players. The respondents are queried on a host of areas including time frame of expectations, bullish and bearish bias and sectoral preferences. The data is then analysed to create various sentiment indices. The readings of the various indices explains the market sentiment and market direction. We also furnish the sentiment data on a periodical basis to financial institutions, fund managers and brokers for further research and investment.
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