fbpx

Technology Has Become Most Crowded Trade Ever, The ‘Longest Long Of All-Time,’ According To A BofA Survey

Technology Has Become Most Crowded Trade Ever, The ‘Longest Long Of All-Time,’ According To A BofA Survey

technology
Technology has become the most crowded trade ever. Technology is the “longest long of all-time,” according to a BofA survey. Photo by camilo jimenez on Unsplash

Technology is now the most crowded trade ever. In fact, technology is the “longest long of all-time,” found a new Bank of America’s monthly fund manager survey.

“Seventy-four percent of fund managers found U.S. technology and growth to be the most crowded trade, the highest level ever in BofA’s monthly survey,” CNBC reported.

But, the fund managers also feel the stock market is overvalued, and as such a second wave of covid-19 is their biggest fear and the recovery is more likely to be U-shaped. 

The survey also finds cash levels rose to 4.9 percent from 4.7 percent. That caution shows up elsewhere — just 14 percent say the economic recovery will be ‘V’-shaped versus 44 percent expecting a ‘U,’ and 30 percent a ‘W’ shaped recovery,” Market Watch reported.

According to three out of four of the 210 fund managers who participated in the survey, going long U.S. tech and growth is the most crowded trade. Nearly the same amount of fund managers think the stock market is overvalued.

BofA strategists are calling tech and growth the “longest ‘long” of all-time since at 74 percent it is the highest reading ever in the monthly survey to say a particular trade is overdone.

Listen to GHOGH with Jamarlin Martin | Episode 73: Jamarlin Martin Jamarlin makes the case for why this is a multi-factor rebellion vs. just protests about George Floyd. He discusses the Democratic Party’s sneaky relationship with the police in cities and states under Dem control, and why Joe Biden is a cop and the Steve Jobs of mass incarceration.

How did this happen? Amazon, Facebook, Tesla, Adobe, and other tech sticks notched new highs on July 13 before sliding to close lower that same day. The Nasdaq continued to decline.

A U-shaped recovery is expected by 44 percent of fund managers, who have raised their cash level to 4.9 percent from the survey average of 4.7 percent, as investors say they are cautious about the virus, the macro picture, and the U.S. election.