11/18/2019
By Charles Payne, CEO & Principal Analyst

Wow! Right now, the best way to describe the stock market is that it has taken off and it’s gaining steam. Even though I’m the rare person (on television and among investing analysts) that said this would happen, I think it’s still impressive to witness. And yet, in my humble opinion, there are still ways to make money on this next move higher, even if you’ve missed it thus far.

The good news is that so many professional money managers have missed the move, and they are playing catch up big time.

Now, They’re Believers

For me, it’s been remarkable how long professional money managers stayed out of this stock market rally. Last week, the monthly survey from Bank of America-Merrill Lynch (BofAML) surveyed 230 global money managers managing $700 billion. We have learned they finally have come around to believing.  They no longer believe this amazing economic recovery and the stock market is a fairy tale, and they want a piece of the action.

The changing of gears is simply remarkable:

• Cash levels, which were the highest in more than a decade, saw the sharpest decline of -0.8 percentage points to 4.2% from November 2016 to the lowest level since June 2013. 
• Global equity positions erupted to 20% of their total holdings from 1%.
• Now, growth expectations have reversed from -37% to +6%, the biggest monthly change since 1994.

Wow! Just think about this for a moment. Folks that are entrusted with helping individual investors with their money have been sitting on so much cash that they missed a monster move. Then, as if bells went off in everyone’s office at the same time, they all become believers. 

Really, what has changed so significantly in one month that these mavens now see positive growth instead of a big decline, and why did they have such paltry equity exposure? I think they were too brilliant, working from old assumptions rather than looking at the evidence in front of them.

Wall Street hates this rally more than ever, as it’s happening in the midst of $360 billion in Chinese tariffs, a situation they told us two years ago would crush our economy and the stock market.  Traditional money managers aren’t the only folks getting in the market, hedge funds and Warren Buffett are making moves, too. 

happening in the midst of $360 billion in Chinese tariffs, a situation they told us two years ago would crush our economy and the stock market.  Traditional money managers aren’t the only folks getting in the market, hedge funds and Warren Buffett are making moves, too. 

To read this week's Payne's Perspective, along with his long idea, contact your account representative or email us at info@wstreet.com.

Charles Payne
Wall Street Strategies

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