Category: Myths

According to the CBOE SKEW Index, the risk of a stock market crash has never been higher. What exactly does that mean? The SKEW Index is calculated based on S&P 500 options, measuring the perceived tail risk in S&P 500 returns over the next 30 days. The higher the SKEW Index, the higher the implied […]

REITs, Rates, and Returns

Interest rates are on the rise and Real Estate Investment Trusts (REITs) have been struggling. The iShares U.S. Real Estate ETF (IYR) has fallen nine straight days, the longest streak since its inception in 2000. If you listen to the pundits, they will tell you that rising rates are the culprit. You’ll often hear that higher […]

Optical Illusions

In August 1987, the Nasdaq 100 was extremely overbought. In July 1998, the Nasdaq 100 was extremely overbought. In January 2000, the Nasdaq 100 was extremely overbought. In October 2007, the Nasdaq 100 was extremely overbought. The Nasdaq 100 is extremely overbought today. Sell everything? If only it were that simple. When looking at the […]

New Highs, New Lows, New Noise

“A large number of new 52-week highs is very bullish. A large number of new 52-week lows is very bearish.” – Pundit Pundits make these statements with conviction. Conviction, we are told, is a good thing, regardless of whether it is based on fiction or fact. New highs, they scream, are bullish. New lows, they scream, […]

We’ve seen a lot in the last two weeks: Manias, Panics, and All-Time Highs. Manias Dry Ships Inc. (a shipping company) went from $4 to $102 in 4 trading day following the election, an astounding gain of over 2,000%. There were a wide variety of reasons attributed to the advance (Trump is bullish for growth/shipping, […]