The limits of using the stock market for business-cycle analysis are no less relevant for the VIX and market volatility in general.
The upbeat state of macro at the moment is almost certainly a factor that’s keeping stock market volatility low.
Market history tells us that a spike in vol is usually associated with a drop in the stock market.
But the historical connection between market volatility and the business cycle is too unstable for drawing general lessons about recession risk.
The warning was wrong, of course, offering another validation of Paul Samuelson’s famous quip that the stock market has predicted nine of the last five recessions.
3 Big Trends Buffett Sees in the Stock Market — The Motley Fool
Actually, just to get back to the coal thing really quick, even though he’s not very bullish on coal, he is pretty bullish on renewable energy, right?
If you have driverless cars, people need less insurance.
If they — driverless cars — make the world safer, it’s going to be a very good thing.
He was asked about a variety of trends at the Berkshire Hathaway ( NYSE:BRK-A ) ( NYSE:BRK-B ) annual meeting in May, and he particularly focused on AI, changing energy production, and driverless cars.
Warren Buffett is known as the “Oracle of Omaha” for his incredible ability to see opportunity (and threat) before other investors catch on.
Stock Market Hasn’t Done This In 22 Years
Stocks have done quite well this year, with the S&P 500 Index (SPX) currently up about 7% year-to-date.
The last year to meet this criteria was 1995, and the S&P 500 gained 16.7% over the rest of that year.
This year is slightly better than average, with the S&P 500 gaining around 7% year-to-date thus far.
Other years, the index gained 3.61%, on average, with 65% of the returns positive.
Low-volatility years have averaged a 5.53% gain, with 80% of the returns positive.