After getting “battered by the Reddit crowd earlier this year,” Wall Street bears have lost their appetite for shorts, as the easing of lockdowns and a fervent vaccine rollout have “driven a risk-on rotation in favor of what was once the least popular equities—low-quality and value shares.” This according to a recent Bloomberg article.

“Wall Street bears battered by the Reddit crowd earlier this year have yet to regain their gumption,” the article reports, “even with stocks at records and valuations near two-decade highs.”

At the same time, Morgan Stanley data shows that hedge-fund longs are at the highest levels in years, a trend the article says points to the “bullish mania propelling global equities to fresh records this month, thanks to the economic re-opening and big policy stimulus.” It adds, “the smart money has little appetite to wager against either expensive or deadbeat companies—especially after being lashed by the day-trader army earlier this year.”

The article reports findings of a survey by the National Association of Active Investment Managers showing that the most-bearish group that typically holds a net-short position has stayed long or neutral in 21 of the past 25 weeks, a “bullish stretch not seen since 2018.”

Concurrently, Deutsche Bank data shows that equity positioning has just reached a new high among discretionary investors. The article notes, “That’s not to say investors aren’t adding downside protection, they’re just choosing to do it in the options market, adding that bearish contracts on the S&P 500 and it biggest exchange-traded tracker have increased relative to bullish ones over the past month.”

Ben Dunn, president of Alpha Theory Advisors, says, “There’s just mass euphoria. No one wants to get their head ripped off by a short anymore.”