At Adam Warner (blog link) writes about Jason Goepfert's findings:
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I checked for any other time since 1990 that the VIX hit a six-month low, while the S&P 500, on which the VIX is based, was still at least 1% below its own three-month high. That would show us times when traders were assuming a low-volatility environment despite prices that might not justify that assumption.
Returns in in the S&P 500 going forward were substandard (and negative) going out as far as two month's. From one to ten days out, the S&P was positive less than 45% of the time, and showed an average return that that varied between -0.1% and -0.8%. Not a huge negative edge, but certainly less than random.
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Over at Motley Fool, they have an interesting stock screen trying to find so-called Buffett stocks (article). I like PBR Petro Brasil best from that list.
Positions: AXP, EWZ, HON, PCLN, all hedged longs
out-the-money short puts expiring 5/16/08
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