Putting Low Stock Volatility To Good Use

source(s):CBOE, VIX and More

A corollary to the above is that while investors often focus a good deal of their VIX analysis on mean reversion, it is important to note that mean reversion is much more predictable and tradeable following a VIX spike than after a significant decline in the VIX.

There are some other interesting statistics and ideas in the Barron’s column that I will address in other posts shortly, not the least of which addresses the performance of the SPX in the years following extreme high and extreme low VIX readings.Stay tuned.

Finally, since I enjoy being a pinch hitter so much, I thought I might highlight one pinch hitter for every new Barron’s column I write. This time around I’d like to put the spotlight on Rusty Staub, who just happened to be at the zenith of his pinch-hitting duties when I moved to New York.In the twilight of his career, the charismatic Rusty tied a National League record in 1983 with eight consecutive pinch hits and also tied the Major League record with 25 RBI from those (24) pinch hits. Rusty finished his career with exactly 100 pinch hits and is currently 19th on the all-time pinch hit list. I realize I have a long way to go to get to Rusty’s rarefied air, but 100 pinch hits is something to shoot for.


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