Regarding the observation that very few bears can hold that outlook for long, I think this is an application of Kahnemans “Simulation Heuristic” and its effect on counterfactual thinking (i.e. regret).
http://www.psychwiki.com/wiki/Simulation_Heuristic
Seeing more and more of your peers reaping rewards on what may be no more than a sucker rally makes it easier to simulate in your mind yourself doing the same thing as they did in the past. However, Kahneman's original research demonstrated that one regrets consequences of action more than inaction, so shouldn't this mean bears tend to stay bearing and bulls tend to stay bullish?

Prospect theory also comes into play. Aversion to a loss increases when one can more easily imagine making that loss. Missing the bottom of the market is becoming easier and easier for everyone to imagine, despite there being little substantive change in the underlying fundamentals. A study of penalty shootouts concluded that the goalie was more likely to take action by moving despite the fact that statistically he was more likely to prevent a goal being score if he simply stayed put.
http://tutor2u.net/blog/index.php/economics/com...
It was easier to mentally simulate being blamed for a goal scored against his team when he took no action, than when he did at least go through the motions of trying.

Economist's subconscious qualification of all their statements with words like “might” and “could”, can be likened to loss avoidance in decision making. Behavioral economist, Daniel Ariely, explains this effect in his chapter on “Keeping doors open”:
http://www.youtube.com/watch?v=RpvpCLI5wxE
So when choosing to be bearing, one cannot help but devote some resources to the bullish argument every now and then, and vice versa.

Regarding the observation that very few bears can hold that outlook for long, I think this is an application of Kahnemans “Simulation Heuristic” and its effect on counterfactual thinking (i.e. regret).
http://www.psychwiki.com/wiki/Simulation_Heuristic
Seeing more and more of your peers reaping rewards on what may be no more than a sucker rally makes it easier to simulate in your mind yourself doing the same thing as they did in the past. However, Kahneman's original research demonstrated that one regrets consequences of action more than inaction, so shouldn't this mean bears tend to stay bearing and bulls tend to stay bullish?

Prospect theory also comes into play. Aversion to a loss increases when one can more easily imagine making that loss. Missing the bottom of the market is becoming easier and easier for everyone to imagine, despite there being little substantive change in the underlying fundamentals. A study of penalty shootouts concluded that the goalie was more likely to take action by moving despite the fact that statistically he was more likely to prevent a goal being score if he simply stayed put.
http://tutor2u.net/blog/index.php/economics/com...
It was easier to mentally simulate being blamed for a goal scored against his team when he took no action, than when he did at least go through the motions of trying.

Economist's subconscious qualification of all their statements with words like “might” and “could”, can be likened to loss avoidance in decision making. Behavioral economist, Daniel Ariely, explains this effect in his chapter on “Keeping doors open”:
http://www.youtube.com/watch?v=RpvpCLI5wxE
So when choosing to be bearing, one cannot help but devote some resources to the bullish argument every now and then, and vice versa.

speaking iof herding…….

http://www.youtube.com/watch?v=GA8z7f7a2Pk

speaking iof herding…….

http://www.youtube.com/watch?v=GA8z7f7a2Pk

Joel – could be a good call – me too.

Of course, everyone knows what “herding” means from the first moment they hear the term. It's another thing entirely to envision a dynamic for it, and this one seems quite reasonable.

I also would hazard a guess that NT personality types are over represented amongst people who read this blog. I am INTJ.

I am still fiercely of the view that the only way to less risky portfolio success is by ploughing one's own contrary furrow, where the greatest risk is picking that optimum moment to act in a contrary manner – it's not exactly an exact science. But hell, if you can make say 30 to 40% in the first flush of the sort of relief rally we've had lately, who cares if you were out for years beforehand or don't get back in for years afterwards – but that attitude doesn't pay Wall St salaries, hence consensus.