Category: Crowd Psychology
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Here comes the volatility expansion
Nine days ago in VIX level shows market’s expectation of future volatility I shared an observation that the implied volatility VIX, a measure of expected future volatility that is implied by option prices, had reached an extremely low… Read More
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The week in review shows some shifts
Much of the observations I shared last week are continuing to be more apparent this week. So, in case you missed it, this may be a good time to read them. Earnings season is tricky… Read More
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Stock market indexes lost some buying enthusiasm for the day
Buying enthusiasm reversed from positive to selling pressure today after the first hour. I observed notable selling volume at the close, which was the opposite of what I pointed out last Thursday.The S&P 500 Stock… Read More
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In the final stages of a bull market
In the final stages of a bull market, we normally see a parabolic move to the upside, a final blowoff that gets in the last investors. Buying demand is the response of investor euphoria like… Read More
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VIX Trends Up 9th Biggest 1-day Move
About a week after a hedge fund manager who is popular with the media but has a poor track record of managing risk said “please stop talking about the low VIX”, it gains 44.4% in a… Read More
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Is this the Inflection Point for Stocks?
As if the election result wasn’t enough, the U.S. stock market has surprised most people by trending up since last November. But, it has been stalling since March. The S&P 500 drifted down about -3% into… Read More
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Asymmetric Volatility
Volatility is how quickly and how far data points spread out. Asymmetric is not identical on both sides, imbalanced, unequal, lacking symmetry. This time of year we are reminded of asymmetric volatility in the weather.… Read More
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Investor Optimism is Reaching Extreme
As it often does, the U.S. stock market trended the complete opposite of what market pundits expected after the election. Clearly, a Presidential election can be the blame for volatility we saw this year before the… Read More
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Essence of Portfolio Management
“The essence of investment management is the management of risks, not the management of returns. Well-managed portfolios start with this precept.” – Benjamin Graham The problem is many portfolio managers believe they manage risk through their investment selection.… Read More
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Each of us tends to think we see things as they are, that we are objective. But this is not the case. We see the world, not as it is, but as we are—or, as we are conditioned to see it. When we open our mouths to describe what we see, we in effect describe ourselves, our perceptions, our paradigms.”
– The Seven Habits of Highly Effective People: Powerful Lessons in Personal Change by Stephen R. Covey, Quote Page 28 (2004) Read More