This column originally appeared on Real Money Pro at 7:22 a.m. EDT on July 11.

NEW YORK ( Real Money) -- As mentioned in yesterday's opening missive, many investor classes have de-risked, and investor sentiment and investor expectations remain low.

This could serve to cushion the impact of slowing economic growth and offset some of the effect of disappointing profit reports in this year's second half.

We shouldn't be surprised, however, by how weak sentiment/expectations are given the following factors:

  • a decade of underperformance by U.S. stock market;
  • two large drawdowns in stocks in last decade (2001 and 2008-2009);
  • the screwflation of the middle class (when the average Joe sees stagnating incomes while the cost of the necessities of life rise, buying stocks ends up low on a consumer's list of priorities);
  • the flash crash in 2010 scared the crap out of everyone (we still don't know the reason for the flash crash, and algos and high-frequency trading strategies still rule the roost);
  • our dysfunctional leaders put partisanship in front of patriotism and effective fiscal policy; and
  • scandals and loss of investor monies with Madoff, Stanford, MF Global and now Peregrine, plus the latest Liebor issues underscore (to many investors) that the system is rigged.

To these influences, I ask two questions:

  1. Why should an investor be optimistic and feel safe under these circumstances?
  2. Won't it take time to win back investor confidence?

In other words, it is different this time.

Also, portfolios that are run by robots and algorithms and other high-frequency strategies don't display emotion, remorse or conscience yet dominate market volume.

How can sentiment take that into account?

Many judging investment sentiment are working with old models that don't reflect new realities.

Poor sentiment may no longer be a positive market tell, as it has been in the past.

Doug Kass is the president of Seabreeze Partners Management Inc. Under no circumstances does this information represent a recommendation to buy, sell or hold any security.