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"The best are bullish; the worst are not."

That's the lead sentence of a column I wrote for Barrons.com in late May, just as Federal Reserve Chairman Ben Bernanke was sending the stock market into a tailspin by discussing a possible acceleration of the timetable for "tapering" monetary stimulus.

Believe it or not, that headline remains equally appropriate today.

To be sure, a lot has happened since late May. The market quickly recovered from the Bernanke-induced tailspin and rose to new all-time highs in July and early August. But stocks last week appeared to hit a significant air pocket, turning in back-to-back triple-digit declines. Might the market be now embarking on the major decline that many worried about in late May?

Anything is possible, of course. But the market timers with the best long-term performance remain steadfastly bullish, while those timers who have done the worst job calling the market's turns are even more bearish than they were in late May.

This best-versus-worst contrast doesn't mean the bull market is guaranteed to continue, of course. And, in any case, a shorter-term market correction could happen at any time.

Still, in order to be bearish right now, you have to believe that the market timers who in the past got it most wrong will now be right — and that those who have been most right in the past will now get it wrong. That seems like a low-probability bet.

When determining which market timers are in the "best" and "worst" categories, I am focusing on long-term performance -- the past 20 years, in fact. So the best timers have proved themselves over a period containing both strong bull markets and punishing bear markets. A bullish stopped clock would not qualify as a best timer, therefore, just as a bearish stopped clock wouldn't automatically make it into the "worst" category.

The Hulbert Financial Digest has market timing records for three dozen services over this two-decade period. The nine that have the best risk-adjusted returns are currently bullish. On average, in fact, they are recommending that their clients allocate 99.9% of their equity-oriented portfolios to the stock market. This is essentially unchanged from the situation that prevailed in late May, when the comparable average exposure level among the best long-term timers was 99.4%.

Encouraging to the bulls

There has been a big change among the worst timers, however. The 25% of market timers with the worst records over the past 20 years are quite bearish right now, on average, recommending an equity exposure level of minus-36%.

This negative exposure level means that the typical timer in my "worst" category is recommending that his clients allocate a third of their portfolio to shorting the market -- an aggressive bet that the market will decline. In late May, in contrast, the consensus stock exposure level among the worst quartile of timers was plus 25%.

In other words, while the best timers are just as bullish today as they were in late May, the worst timers are significantly more bearish.

As a result, there is now a significantly wider spread between the consensus exposure levels of the best and worst -- 136 percentage points, versus 75 points in late May.

If past performance counts for anything, this contrast has to be encouraging to the bulls.

Might there be a catch? Might there be some quirk of the 20-year time period on which I focused causing this huge of a contrast between best and worst?

To rule out that possibility, I constructed groups of best and worst timers over other time periods as well — the last one, three, five, 10 and 15 years. Regardless of the period, there was a similarly large contrast as with the best and worst 20-year performers, with the best timers far more bullish than the worst.

As mentioned above, however, virtually all of the top performers say that a shorter-term correction could occur at any time. A few of them go further and say that they would actually welcome such a pullback as increasing the long-term health of the market.

Furthermore, the consensus of the top timers is not to go way out the risk spectrum and make particularly speculative bets.

Consider, for example, the mutual fund that is currently most popular among these top timers. It is the Vanguard Dividend Growth (VDIGX) fund, which focuses on blue-chip companies with a long record of sizable dividend increases. It is significantly less volatile than the overall market, with a beta of just 0.65 over the last 15 years, according to Morningstar.

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