Tuesday, September 2, 2008

Retail stock investors at a low

Individual ownership of US stocks has fallen to a record low, underscoring the increasing importance of institutional investors in domestic equity markets, according to a report to be released today.

Retail investors owned 34 per cent of all shares and 24 per cent of stock in the top 1,000 companies at the end of 2006, the last year for which figures are available, said the Conference Board, an industry group. Both numbers are record lows.

By contrast, individual investors owned 94 per cent of all stocks in 1950 and 63 per cent of all shares in 1980, the group’s 2008 Institutional Investment Report said.

Home ownership was at a high in the housing peak. Now you have equity ownership at low at the equity trough.

But the bears won't get it. They're still too short warning us about the depression around the corner.

Just like the peak oil doom and gloomers warned us about oil.

Sears is the poster child of the shorts. Let's assume that retail investors own 25% of the stock.

Institutions own 151 million of Sears 132 million outstanding shares. If retail investors own 25% of Sears then, you have another 40 million shares. Add in Berkowitz' new 9 million share position, and now you have shareholders that own 200 million shares while only 132 million shares are outstanding.

Why do you think the bears are touting the next depression. Because they were short!

Why do you think Goldman Sachs was touting $149 oil? Because they were long!

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