Buy When Others Are Fearful - 03/17/11

The AAII Survey indicates that bulls have come down to 28%, a level seen only five times since the March 2009 low.

Coincident with my upbeat opening missive yesterday, I was more constructive on the U.S. stock market than I have been in many months on "Fast Money" last night.

As subscribers know from reading The Edge, I have been a net buyer of stocks over the past few days, even in what I have described as a bull market in uncertainty (which, in its decline, has replaced a bull market in complacency that existed only a few short weeks ago).

While I will have a full recap of my "Fast Money" appearance later in the day, I wanted to make the point (and ludicrous forecast) that, barring a catastrophic outcome in Japan, it is not inconceivable that the 2011 lows in the equity market might have been hit when the futures were down over 10 handles last night. (They have since reversed dramatically.)

Warren Buffett, the Oracle of Omaha, has, as his basic investment tenet, the notion of buying when others are fearful (and selling when others are greedy).

In support of the emergence of fear, I pay close attention to the AAII Survey, which, today, indicates that bulls have come down to 28%, a level which has basically been seen just five times since the generational low in March 2009 (the July 2009 low, the early-November 2009 low and twice last summer, once in June and once in August; hat tip to Ms. Meisler). All five times provided unusually attractive buy points.

Here is the tape of my segment on "Fast Money."