Welcome to Hill’s Volatility
According to Investopedia: “Warren Buffett views market volatility as a “friend” and an opportunity rather than a threat, advocating for investors to remain calm, avoid panic selling, and buy quality companies at discounted prices during downturns. He believes in focusing on long-term business value, ignoring short-term market swings, and treating market dips as sales events.”
So there we have it. Market dips are friends, not something to fear. In the long term good businesses go up and occasionally down . Even conservative dollar cost averaging investors can increase returns by knowing when market dips occur and to take advantage of them.
One of the best ways to quantify and visualize market moves is by observing volatility or fear and greed indexes. . There are a few ways of measuring volatility. Often news media will show the VIX index. However, VIX is options implied volatility used for options trading, not market index investing. CNN has a fear and greed index using a variety of inputs such as VIX, options, and various bond prices to produce a daily fear and greed score. Unfortunately these non price based indexes is all most investors will have access to.
I always thought it peculiar that volatility measures based on inputs from other non price specific sources was the way most media measured the market mood. If you want to study index prices then study index prices not something that may or may not be correlated .
I wanted to know when the market dipped but also when it was a major dip. I also wanted to know when the market was in a bullish trend. I decided I would create such charts for myself.
My objective is to present volatility as accurately as possible using prices and prices only as inputs, not options numbers or bond price numbers and to use the most accurate mathematical models available to produce a simple to understand visual . The result is charts to:
Visualize opportunities.
Visualize bullish trends.
Build confidence for better decisions.
Seeing is Believing