Welcome Friends, 

Here’s an assortment of posts shared this week on Trends with Friends. Let’s dive in…

THE MARKETS ARE SPEAKING VIA THE $VIX

Last week, the S&P 500 volatility index ($VIX) spiked to its highest level since April 2024. Howard Lindzon is taking notice. 

Lindzon writes, 

I try not to get excited about the markets until the $VIX spikes to 20 or above.

Above 30 and I am locked down thinking about buying my favorite growth companies/ETFs. Once or twice a year we get a spike above 20…and in March 2020 we spiked to 90 with the COVID panic (I started Panic With Friends because I believed it was a historic opportunity to NOT panic).

Today the $VIX spiked past 18 (courtesy Koyfin.com)

This tells me the headlines will start getting even spicier which means I will try to read even less.

Let’s be honest…the headlines, the internet bullying, bullshit and stupidity can’t get much worse. Beneath the bullshit, there is truly some bad news and bad behavior going on out there right now. You do not need me to recap.

Prices are how I recap the news. Less drama, more truth.

I am surprised it took the $VIX this long to spike considering the last few weeks but here we are.

OPEN AI’S AI SEARCH

OpenAI’s AI Search is here. Michael Parekh provides a wonderful overview on one of the most anticipated AI product announcements of 2024. 

He writes, 

It’s important to underline again that Compute resources at scale are critical for AI Search, at least as much as for ‘Chatbot’ services. As I explained yesterday, AI products and services, from chatbots, to search to AI reasoning and Agentic capabilities, are a ‘variable cost’ service. They require ever increasing amount of expensive training and inference compute as mainstream users grow in numbers and their usage.

New competition in an old space is a good thing for us all though. And I for one, am looking forward to trying OpenAI’s SearchGPT when I get my turn off the waitlist. Stay tuned.

Read Parekh’s full post here.

SELL PUTS WHEN YOU CAN

As volatility increases, JC Parets seeks to sell puts.

The Volatility Index almost hit 20 this week.

That means there are opportunities to generate income that simply were not there before.

“Get while the getting is good”, is how I learned it.

A month ago you weren’t getting paid to sell volatility.

This week you are…

Something we do quite often around here is sell naked puts in Berkshire when people get scared and volatility spikes.

THE GREAT ROTATION CONTINUES

Charlie Bilello’s Chart of the Day displays the continued rotation in Small-Caps. 

Charlie comments, 

US Small Caps ($IWM ETF) are up 7% over the last 10 trading days while US Large Caps ($SPY ETF) are down 4%. The 11% spread is the largest 10-day Small Cap outperformance ever (note: data since inception of the first Small Cap ETF – $IWM – in May 2000).

CRISIS COMMUNICATION

CrowdStrike’s global internet outage was a friendly reminder as to the importance of effective communication during a crisis. Ted Merz shares how crisis communication has changed in an era of Twitter // X and how companies need to adapt.

Merz mentions, 

Companies facing PR disasters are not new.

What is new:

• Companies need to respond faster

• Communicating via X

• The CEO posting directly

These days, the most important thing – really the only thing that matters out of the gate – is writing an effective, accurate tweet very quickly. Everything else comes second.

The tweet needs to a) explain the situation in plain English b) acknowledge responsibility c) provide a sense of what comes next.

Before the emergence of X as the default global town hall, a statement would be sent to the news media. Reporters would write an article and provide context.

Now, the statement needs to stands alone.

Read Ted’s latest here.

PODCAST LINKS: CULTIVATING CURIOSITY

“Cultivating Curiosity” is the theme of Tadas Viskanta’s podcast links. Here’s a sneak peek. 

TRENDS WITH NO FRIENDS

Trends With No Friends sifts through the noise and discovers stocks above $1B market cap with high relative strength and low social following.

The publication shares 52-Week Highs and Lows sorted by followers on Stocktwits. 

Why is high relative strength and low social following important?

Stocks that are outperforming tend to continue to outperform. Stocks that have a low social following are, by definition, undiscovered by the crowd. Stocks that have both Relative Strength and Low Social Following can really outperform as more investors discover them.

This week, Trends with No Friends featured… 

First Bancorp ($FBNC), Alcon ($ALC), NBT Bancorp ($NBTB), Shinhan Financial Group ($SHG), BancFirst ($BANF) and more.

THIS WEEK’S EPISODE

And in case you missed it… This week, Howard Lindzon, Phil Pearlman, JC Parets, Michael Parekh and Riley Rosebee review Meta’s Smart Glasses, CrowdStrike’s Glitch, The Degenerate Economy, Financials and more in the latest episode of Trends with Friends.

Tune in today.

GET IN TOUCH

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