With the Dow closing near 12,000 today, I thought I'd peruse the CNBC (First in Business Worldwide) webpage to see what analysts were talking about. I'm not sure why I do this...I am almost always left scratching my head afteward. A deficiency on my part, no doubt. Maybe some of you out there can lend me a hand.
Take this, for example. Here is a CNBC segment entitled "Pick a Pro's Brain," a short interview with Deutsche Bank's Binky Chadha labeled "Investors Are 'Very Underweight' Stocks." The entire interview sounds like gibberish to me. The man is speaking in a language that I trouble understanding.
What does it mean, in particular, for investors to be underweight stocks?
I think we can all agree that the outstanding stock of equity shares is owned...by someone, at least. It is therefore impossible for the population as a whole to be under or overweight in stocks. It is only possible for different groups holding different positions to be considered under or overweight.
Now take the set of potential owners. It appears that this set can be divided into two subsets: investors and non-investors. I'm am not entirely sure what governs this division.
In any case, the claim is that investors are underweight stocks. Fine. But simple arithmetic then implies that non-investors must be overweight stocks.
So I am wondering: Is this, in fact, what Binky is saying? And if it is indeed what he is saying, then why is knowing this interesting, and how is knowing this important?
Take this, for example. Here is a CNBC segment entitled "Pick a Pro's Brain," a short interview with Deutsche Bank's Binky Chadha labeled "Investors Are 'Very Underweight' Stocks." The entire interview sounds like gibberish to me. The man is speaking in a language that I trouble understanding.
What does it mean, in particular, for investors to be underweight stocks?
I think we can all agree that the outstanding stock of equity shares is owned...by someone, at least. It is therefore impossible for the population as a whole to be under or overweight in stocks. It is only possible for different groups holding different positions to be considered under or overweight.
Now take the set of potential owners. It appears that this set can be divided into two subsets: investors and non-investors. I'm am not entirely sure what governs this division.
In any case, the claim is that investors are underweight stocks. Fine. But simple arithmetic then implies that non-investors must be overweight stocks.
So I am wondering: Is this, in fact, what Binky is saying? And if it is indeed what he is saying, then why is knowing this interesting, and how is knowing this important?
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