The VIX is Screaming, Tech is Zooming, and My Gut is a Total Liar
Written by: George from The Smartin Team
The VIX is at 16.12. It jumped 5.29% while I was sleeping. You know what that is? That’s not a “fear gauge.” That is the sound of my heart skipping a beat every time I look at a green candle. It’s the market equivalent of your doctor saying, “We’ll call you with the results.” Nobody wants the call! You want the results now!
Last week, the SPY crawled up 0.53%. It was pathetic. It was like watching a snail try to climb a wet windshield. But the QQQ? Up 1.77%. Tech is just vibrating. Why is it vibrating? My gut says it’s a trap. My gut says it’s 1929 and I should start hoarding nickels in a coffee can. But as we’ve established, my gut is a moron. My gut thought I could pull off a fedora in 2014. It’s been wrong about everything for a decade.
The Silence of the Lambs (And the Aussies)
So, I’m doing the opposite. My brain says tech is a bubble, so I’m out here hunting for a good peg ratio for tech stocks like I’m looking for the Fountain of Youth. I saw Unity (U) went up 9.4% last week. Zoom (ZM) up 6.4%. Why? Who is zooming? I haven’t zoomed in years! I’m still trying to figure out how to un-mute myself on a landline.
Lynch says you have to “know what you own,” but I don’t even know what I had for breakfast, and I’m pretty sure it was a coaster. If the growth is there, the price is “reasonable,” right? That’s what they tell me. It’s like saying if I run fast enough, the calories in this jelly donut don’t count. It’s “Growth at a Reasonable Pace.” My pace is a light wheeze.
Meanwhile, the global markets overnight—Australia, Israel, Europe—were quiet. Nothing. Not a peep. You know what’s scarier than drama? Silence. It’s the silence of a neighbor’s dog that stopped barking. Is he asleep? Or is he right behind me, waiting for the opening bell to take a chunk out of my DIA position, which was already down 0.57% last week?
Spelunking in the Basement
And look at AMC—down 15.8%. Every time I think that stock has hit the floor, it finds a new basement. It’s a subterranean stock. It’s spelunking! It’s in the crust of the earth! DraftKings (DKNG) down 12.2%? People have stopped gambling? Since when? I gamble every time I eat a deli shrimp salad!
My instinct is to buy the dip on the losers, but Peter Lynch didn’t say “buy the dumpster fire because it’s cheap.” He said look at the debt. If I looked at my own debt-to-equity ratio, I’d have to sell my own shoes. I’m trying to stay professional here, but it’s hard when the VIX is staring at me like a bill collector.
I’m going to spend the next hour before the open staring at the tape, waiting for a sign. If the QQQ moves another inch, I’m throwing my gut out the window and buying everything that makes me feel slightly nauseous. That’s the strategy. If I’m not sweating, it’s not a play.
Before you make a move based on your own stupid instincts, check The Hitchhiker’s Guide to Peter Lynch Investing to remember what a real metric looks like.
I use this fun stock market app to tell me I’m being an idiot before the market actually takes my money to prove it. Run your “gut feeling” through the logic-bot here.