Investor Agenda

Will Regulatory Reforms Have A Big Impact On Investors?


The regulatory reforms are not likely to have a big impact on stock market investing.

Many sources say the bigger issue is the Government's stronghold on business, whether in banks, insurance companies, or autos.

The new structure has been debated throughout Wall Street and the one red flag seems to be the Federal Reserve needing to get approval from the Treasury for extraordinary moves. This may undermine the Fed—the last bastion of independence in Washington.

Meanwhile, perhaps a bigger issue for stock investors—the retail investor has joined the bull market party. Some people feel this to be a contrary indicator and time to get out.

TrimTabs.comPresident Charles Biderman says it means the market has topped out.

Biderman notes that on March 9th, market value was at 9 trillion dollars, the market rallied all the way up to 13 trillion on May 19th, which was institutional money moving into the markets. But since May 19th to June 15th, market value hasn't changed much at a time ETF investors have begun to follow the herds into stocks. Add to that companies are selling 50 billion a month in new shares—you have to ask—where will the sidelined money come from for a next leg up?


There is very little money to come in over the near term. Biderman is now doubling his short position. "Also the green shoots is nonsense" he adds.

He is shorting banks, retail and consumer discretionary. On inflation, Biderman says yes at some point you want to play it—but—before the inflation trade, comes the deflation trade. "We are going down before going up."

He is calling for a double dip here.



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