The VIX Is Up, My Spirits Are Down, and Why I’m Buying Chicken
Written by: George from The Smartin Team
I’m sitting here at 8:30 AM, staring at a lukewarm coffee and a VIX that’s sitting at 15.42. It’s up 3.91%. Why is it up? What does it know? It’s like the market is a dog that just heard a vacuum cleaner in the other room. It’s not barking yet, but the hair on its back is standing up, and I’m the one who’s going to have to clean up the mess on the carpet.
Last week, the SPY was up 0.48%. Big deal. My laundry bill went up more than that. Meanwhile, the QQQ dropped 0.65%. Tech is hurting, and yet everyone is piling into Zscaler (up 15.8%) and Wingstop (up 14.4%). I don’t get it. One protects your data, the other gives you buffalo sauce on your shirt. Is this the new economy? Cybersecurity and drumsticks?
My Gut Is a Pathological Liar
Every instinct I have tells me to run. I see the VIX jumping and I want to hide under my desk. But I’ve learned my lesson. My gut is a traitor. It’s the guy who tells you “that haircut looks great” right before a first date. So, naturally, I’m looking at the overnight global moves—Australia’s ASX 200 was up 0.76%, Europe’s Euro Stoxx 50 rose 0.71%—and I’m forced to admit that maybe the world isn’t ending. It’s just me. I’m the only one ending.
If I followed the old “buy what you know” rule, I’d be all-in on Wingstop because I know what it’s like to eat forty wings alone in a dark kitchen. But Lynch says you have to look at the numbers, not just the sauce. Is the P/E higher than a kite? Is the debt pile bigger than the trash heap behind a stadium? These people are bidding up WING like it’s the last chicken on earth.
The “Doing the Opposite” Strategy
Look at Intel. Down 9.9% last week. My gut says, “George, it’s a blue chip! It’s on sale!” Which means it’s actually a flaming dumpster fire that I should stay away from. Then you have MVIS dropping 18.4% and the crypto miners like MARA and RIOT falling over 12%. My instinct is to feel bad for them. Instead, I’m going to mock them. It’s much more productive for my blood pressure.
We are entering a week where the fear gauge is ticking up, but the rest of the world is whistling a happy tune. It’s a divergence. And if there’s one thing I hate more than a divergence, it’s a “reasonable valuation.” Who decided what’s reasonable? A guy in a suit who hasn’t felt a real emotion since 1994?
I need a fun stock market app just to keep me from throwing my laptop out the window. I need something that tells me the cold, hard truth before I make a spite-buy that ruins my retirement. Because if I’m left to my own devices, I’m going to end up owning 5,000 shares of a company that makes digital socks, just because I had a dream about toes.
Stop trusting your “feelings” about a ticker and get the 15-second fundamental truth before your anxiety makes the trade for you.