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The Next Time Your Financial Advisor Tells You To Buy Stocks, Show Them This Chart
Earlier today, we noted that while the market was surging last week, the smart money was selling. This comes at the same time as ICI reported major redemptions from both stock ($3.9 billion) and bond ($4.5 billion) mutual funds, even as corporate buybacks were decelerating, leading to the question of just who was buying stocks during the Santa rally of the past two weeks.
But something even more surprising emerged when looking at the detailed breakdown of how the "smart money" has been flowing. As Bank of America clarifies, when explaining where its $0.7 billion in weekly outflows came from, "net sales were chiefly due to institutional clients last week" and adds that institutionals "have sold stocks for eight consecutive weeks"!
And then something even more surprising emerges when looking at the YTD breakdown of flows: while hedge funds and private clients (retail) have largely offset each other over the past year, the former selling $2.8BN and the latter buying $2.2BN in 2015, something odd has taken place at the institutional level: starting in early January, the largest financial institutions - mutual funds and various other asset managers - have unleashed an unprecedented selling spree for 11 consecutive months, which has brought their total outflow to $26.8 billion.
Which leads to another question: if institutions are actively dumping stocks, perhaps mom and pop investors should show the following chart to their financial advisors, who directly or indirectly work for these institutions, and ask them: why should they be buying, when the counterparty they are buying from is, most likely, this very same financial advisor?
It isn't just 2015: as BofA adds, and shows in the next chart "institutional clients overall were only net buyers in 2009, as well as in 2011." They were net sellers all the other time as the green line clearly shows.
Finally, here is the full breakdown of what all of Bank of America's clients have done since the start of the recession: it is almost as if they have all been... selling?
Just who is the greater fool?
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get out bitchez!
https://www.youtube.com/watch?v=0akBdQa55b4
just btfd bitcheezz
Stocks have been the best-performing asset class over the past 6 years.
Gold and silver have been the worst. Which explains why Zeroes are perpetually in a bad mood.
"Zero Hedge: Home of the Dumb Money."
Dumb money invests in a Ponzi, that being the stock "markets".
Do you push heroin to teenagers too?
Gold & Silver have a 2,000+ year history.
Equities and the Dollar? Not so much.
1 week old troll.
Dammit Bung, that was rough. Be kind, will ya'? He'll be a whole two weeks tomorrow.
Actually, in the not too distant foreseeable future I will be investing in some stocks. Major miners mostly, but sprinkled with a few minor miners as well. Once deflation is done, I anticipate the miners based in the US and Canada to do rather nicely.
Until then, I am enjoying the spirits of the season, (mimosas early, Sierra Nevadas midday and Hot buttered rums or a brandied eggnog late; a small port with a Ghiradelli brownie right before bed). Happy New Year to all and by all means, keep your powder dry.
Give this guy a fucking silver medal. If we have to believe this fucker its wortheless. Someething from which I am sure that is wortheless is this comment. Next to a medal, give this guy a Pokemon card and he will hopefully shut the fuck up for a whole year.
dunno bout you, dumbass, but accounting for currency changes my gold is up 15%
why would i want my money in stocks when it will be gated should i ever need to pull out ? kinda makes percentages arbitrary and irrelevant, doesnt it?
StumbleBum is a sheep preaching sheep bullshit because he has been trainned to do so....
How small has your box got there Stumblebum? Wait till the end of 2016 and you can take those fake stocks with those fake dollars and eat the bullshit paper...
2016 is going to be the start of the real bulls BITCOIN GOLD SILVER. The fucking retards who think company buy backs equal stock profits over the long haul is missing more then a screw loose...
HIS HEAD IS SOO FAR UP HIS ASS HE SEE PAKI BROWN!!!!!
Is that you Ben?
... turn those charts upside down!
Actually, that idiot who used to do that used to be at Business Insider who is now at Bloomberg.
What qualified this guy to be a reporter?
I am sorry, I am not familiar with this matter. Is this true? (It is a serious question btw.)
https://images.rapgenius.com/eb227f16aae57042a64557c40becae3e.263x251x1.jpg
Looking for more bag holders.
The Fed owns everything now. They are the buyer of last resort.
Works until there are no sellers left. Solution: FED sells and other CBs buy them. Problem solved.
Maybe the Fed wants to own everything.
A private banking institution wants to OWN everything? You're crazy!
They don't even need to do that. Just set up two trading desks and trade ETFs back and forth, bidding them higher each day.
call them ping and pong
Right. It works until it doesn't.
Who the hell still has an account at Merril Lynch?
Obviously nobody, thus the selling....
So you're saying now is a good time to buy stawks or to buy the dip which one?
Pull out method...just the tip?
Right. See title of chart 3
I'm not sure I understand. Institutional money has been flowing out of equities for years? Yet equities are up? So what is the source of the money replacing the institutional money? The Fed? Stock buy-backs? Mom&Pop? Foreign money? ?
The one biggest buyer of stocks since 2009 have been "corporate clients", aka buybacks...
... funded by cheap debt courtesy of central banks.
And the same investment banks that are reaping a percentage of the corporate debt deal are the very same people selling back the stock to the company after the deal is done. Talk about a perfect racket...
In Statistics it's called a Money Pump.
Nice executives and major shareholders using debt to sell their stocks back to the corporation.
And corporations use buybacks to soak up new shares created by option bonuses.
Interesting. So corporations would retire equity since it tends to produce higher EPS. And they can justify borrowing to do so since the money is near free. But the cash used for the repurchases and the cash used to repay debt plus minimal interest used to fund some repurchases is cash that is therefore not being reinvested in the business. That would seem to me IIUC to suggest that corporate managements are less than confident about earnings prospects, no?
EPS? What's that? Never heard of it. All that matters is price.
Silicon Valley, when they outsourced all their silicon manufacturing, turned into inventors of financial justification for not earning a single dime and still being the darlings of the U.S. equity markets. They have since taught most of the developed world industry how to do this basic fraud.
Earnings have no place in a financialized economy.
yes
Great time to raise rates if you're "data dependent" /s
Welcome to a world without true price discovery, where large buybacks can be timed/scheduled and executed with the speed of fiber optic networks and algorithms for maximum effect on stock price in a relatively low-volume market.
Next time your financial advisor tells you to buy stocks...
...stick a gun in his/her mouth and pull the trigger until you are out of fucking bullets.
Wow. A little bitter about your miners and the silver price after buying at the peak?
Not at all.
I was being funny.
Its that time of the month and I am out of my Percocet.
If only we all started killing bankers and financial "advisors" in 2008...
Because nothing engenders hope in the economic future more than corporations leveraged up to eyeballs.
The greater fools?
SNB and the BOJ? Maybe...they seem to like having large equities exposure as of late...
Don't invest, hoard. Beans, bullets, band-aids, bullion. Toilet paper, tampons, and tooth paste.
And what if the next thirty years are fairly similar to the last thirty? Who comes out ahead; the guy with expired cans of food and bandaids or the guy that bought Conagra and JNJ?
To your point, you might as well be an optimist because if gets down to cans of beans, your neighbors will end up killing you for you basement store anyway.
Good question. Dried beans and white rice store indefinitely if stored correctly. The same can said for ammo, bandaids, and bullion never expires. But hey, if you can find a stock or bond that is priced correctly, be my guest. Otherwise, I would say stock up until the 'great reset' finally unwinds.
Have a seance and tell me what happens.
A LOT of institutional money is going into commercial real estate, which is overpriced and illiquid; many institutions are still reallocating to other asset classes. I'm not sure that spells CRASH in 2016. Buy stocks with a solid balance sheet and a nice dividend yield. Reinvest dividends and pick your exit point.
If you have a thirty year horizon for holding a solid blue chip research shows it doesn't matter when you buy. Im not personally buying at these levels but if someone does and they have a long enough time horizon pull the trigger and do it and reinvest the divies along the way.
Well stated.
In thirty years some millenials will just be getting out of debt. So they will heed this advice then I'm sure.
sage advice...thanks uncle warren
Please refer to the motto of the this site (paraphrasing): In a long enough time frame we're all dead.
Since in thirty years there is a high likelyhood that I will be dead, I'm much more interested in what happens, or will likely happen, to the money I'm going to need over the next 5-10 years. So sure, if you're in your twenties or thirties and have the intestinal fortitude to watch your net worth drop by 50%, or more, over the next 10 years, hoping that it will recover (meaning it will have to rise 100%) over the following 20 years, by all means, knock yourself out. As for me, no thanks.
Research = "the last 30 years".
Has to last forever right guys?
When the government/banks decide to stop trying to lure investors into gambling and shopping, you can be sure, there will be more and more Obamacare type laws to separate you from your tight-fisted savings. If no one will buy then we will take it...first with taxes, fees and laws and later with bail-ins and confiscation. 2050 is not going to be a good time to be a human being.
I wonder if 2050 America will be worse then Trench warfare and mustard gas? I sure hope not.
But but but there is so much money on the sidelines now.
If you were a public company, why wouldn't you borrow cheap money and buy back equity? Makes sense to me.
especially if the bulk of my compensation was in stock options
and never planned on paying it back
YTD cum. flows
SRSLY?
Bukake.
"Chart 3: YTD CUM"
I thought this was going to be a chart of the Kardashians faces. Holy hell, I got luckly on that one.
Next time your financial advisor tells you to buy stocks...
tell them to read this...
https://www.linkedin.com/pulse/truly-big-shorts-john-m-cunningham?trk=pu...
So...the hedgies are still holding, eh? Guess they need to keep PRETENDING that they know what is going on. Never mind the fundementals, full speed ahead! Damn the torpedos! Meanwhile the AUM IS sinking, no? Yes.
Cum flows. Sometimes, it shoots and strings ropes, too.
In the case of institutional investors, however, it dribbles.
b hussein homobama hoops star dribbles before he shoots
Does your mommy and daddy know you've been using their computer, little child?
In truth, "dribbles before he shoots" would be a perfect explanation for why an otherwise missionary-style procreative technique might produce two horrible-looking females. Unless of course Michelle was on top, which of course is too horrible to imagine.
I can't get the vitriol and vile comments made not just toward Michelle, but most pathetically, toward the two girls.
I despised GWB, but I never lumped his two girls and Laura in with my disgust for him.
WTF is wrong with you people?
They're all bad people and should be ridiculed. What's wrong with you people?
I've got a little secret I'd like to tell you. Just about everyone in my family was talking about "that little nigger boy", even before his presidential inauguration ceremony in 2008, and all they have ever called him since 2008 is "that little nigger boy".
They have never referred to him as the president this entire time. All they've ever called him is "that little nigger boy".
Frankly, I'll be very happy when another president is elected so I won't have to listen to their shit anymore.
But mostly I'll be glad for them, because hopefully they will finally stop their incessant worrying about his private army of jack-booted thugs coming to kick down their doors, taking their guns and whisking them away in black helicopters to be placed in the FEMA work camps, etc.
If all these groups are selling... Then who is buying to keep the market from cashing?
The Fed?
Stocks are held in street name and bonds will tank. Gold could be confiscated. Derivativs could blow up.
My neighbor says he's making a fortune on derivativs but they still make me nervous.
There is a reason they call them to big to jail.
I don't trust any of them. What to do. What to do.
Gold can't be confiscated if you own Canadian PM Trusts that trade. There are several. The closed-ended ones are the best because they know what they have. GLD and SLV here in the US have so much coming and going, they don't know what the hell they have. When the day of reckoning comes and they open the vaults, some cockroaches and a mouse or two will skipper out...........
Wonder who is gonna eat this ookie-cookie. . .
I may well miss the boat on potential gains, but I decided to take '16 and crush any kind of debt we owe, excluding the home mortgage, so that we simply feel light. Things look frothy. The markets are rigged. I don't have near enough intel to profit from insider decisions. I don't want to look at the recently passed omnibus bill which reads like a who's who of companies/industries one should pour money into because I'll just end up investing in entities that literally kills or injure folks. I'll stick to my personal currency trading and enjoy life until things/markets appear clearer. Lastly, it's always the mom and pop investors who are literally buying stocks and providing current holders a clean path to the exit of the burning theatre. Fuck them.
Show him that chart and he'll be like "hey, cash is a good place right now for sure. But for the long haul, hyperglobalmegacom dot net is so strong."
I'm personally driving to Aspen just to Gillooly my Ed Jones guy. In front of his stupid kids, to boot.
These big shot brokers don't know shit. And worse, they are lazy as hell and most of them drink too much. I don't think I've ever learned one thing from any of them. I love it when they say, "I let the market tell me what to do." Then I say, "Well, what the fuck do I need you for? The market can tell me what to do too and it's telling me I don't need you." These guys are all about trends, jumping on the bandwagon. Without that, they are lost. And they all hate gold and silver for the simple resaon that they can't sell it to you but if they could, they know you wouldn't trade it anyway because you don't buy PM to trade.
Institutional has been dumping stocks and piling stocks of precious, just look at the silver charts on tonights companion silver artical. These bankster have all the cards all of the time, it is the way they play their game of moneychanging.
Best of all, ZH posting a piece that disparages advisors, while showing charts generated by a firm with largest advisor force in the world. That's what I refer to as LOLOLOLOLOL....
Sold the last of my stocks before the FOMC meeting. Reasons:
1. Influence of ZHers (thanks to all who encouraged me)
2. Loss of confidence in paper-anything.
3. Loss of confidence in WF Advisors. Key turning point was when advisor's secretary said, "we don't give tax advice." Things they never told me when I opened an IRA that doesn't give me any tax benefit. What happened to helping clients make an informed decision? "Check with your accountant because you may/may not qualify for tax deduction" would have been helpful before I opened it.
* Edit: advisor seemed increasingly consumed with managing for his client with $165 million, and the rest of us in the $200 million fund were forgotten.
5. Risk constant, gains marginal. Why am I invested, again?
As a very wise man once said, "Better to be out of a stock wishing you were in than in a stock wishing you were out."
There are two big question relating to the aggregate transaction data from BofA/ML (and some of them have already been touched upon in the comments):
1. Is ML data representative of the full market of all stock transactions?
2. How are corporate stock buybacks being accounted for?
Attempts at answers:
1. No, it cannot be, because because buys and sells have to balance in full-market aggregate data, and the ML data shows net selling.
2. Presumably a corporation doing a stock buyback would be counted as an institutional purchase. Again, given that the ML show net institutional selling, the stock buybacks cannot be a significant part of the data. Either ML corporate clients don't do much stock buybacks, or the transactions simply have not been counted as part of the institutional trading. So which one is it?
Can we have a link to the full BofA/ML report, please?
The little guy could be a contrarian.
Leaving your money in, well, money is a guaranteed long-term loser.
Putting some of it in precious metals is a guaranteed, well, protection.
Investing in property is, well, depending on what and when you buy, winner.
But buying stocks at this peak, and especially when this garbage is going on, is insane.
Q: So what do we do, mommy?
A: Buy precious metals, land, and leave a little in actual money.
Long term yes, in times of actual deflation it's positively genius.
If we do get deflation it's because it's what's for dinner so if there was ever a time to be flush with cash it would be during real zinger of a deflationary spiral.
If I had a lot of money right now I'd want cash because I think there is going to be a real fit of deflation comming and if so everything is just going to get a whole lot cheaper.
We're at the limits of credit worthiness that creates deflation first then after it sets in long enough comes the money helicopters so it's raise cash then buy a whole bunch at the first whirring sound.
Course if I'm right there isn't much you can sell about now without taking a beating.
If I owned stocks I'd sell them all right now and sit.
Financial advisor and you are standing at a roulette table. He tells you to invest 80% on black and 20% on zero.
Ball begins spinning, bounce, bounce..bounce, bounce.
34 red. So sorry. Let's margin call the casino money to get it back.
I read this yesterday early morning. Was in tears laughing.
The Idiocy Of So-Called 'Financial Media'
Comments are classics.
https://market-ticker.org/akcs-www?post=230996#discuss
My favorite post in the rumble.
Thanks, my read of the week, Man!
According to my calendar, January has not yet occurred. Please explain: ....."starting in early January, the largest financial institutions - mutual funds and various other asset managers - have unleashed......"
I'm getting barked at by Mrs Atomizer, play time is over until early AM this morning. Please read Karl's breakdown on Apple. Tyler has been discussing the same at different tones, with the same overview.
Read Karl's Leverage book. It may help you understand. Tyler helps as well. Both good sources for you. Off to bed before I get into doghouse. My wife is glad that I enjoy financial porn. Winks.
I must have missed the reference. Could you please share more info, or a link? I'd like to read this book.
Thanks for any info...
karl denninger
Thanks, dude! : )
Did you look at the Chart supplied? JAN 2015, not 2016...they are looking backwards at past data.
Damn institutional cum. flows. Just take it on the chin like your private clients
Wasn´t this how GS flawed their muppets.
I think many more people will pull their money out after they get their year end statements this year....flat with a loss after the fees...plus they have their new Obamacare bills....and will need the cash to pay for that
What becomes obvious is the entities holding the proverbial bag; the pensions and 401K's and IRA's. IOW's the "man on the street"; so a the insiders are sliding out the back-door and shorting while leaving the HFT logos blowing hot air and the last one out turns off the "hot air" and "it's gone".
I basically told him to go %$#* himself just for calling me. I'm not showing him any charts, that's a waste ofmy damn time and I have a limited supply.