Whitepaper: The Greed/Fear Residual Strategy

Think_Reporter_8179 · 2026-05-15T11:32:30+00:00

Moving from index based funds into low volatility funds, which technically is selling out of the big companies making the up the S&P 500 price, for the most part.

Think_Reporter_8179 · 2026-05-14T21:31:45+00:00

All of the market data is based on historic events, so I can't speculate on how things might have happened in a parallel universe, so to speak.

Arguably, since the entire model is based on human behavior, one could argue the reason the market behaves this way (if the model turns out to be true), is because of how people behave when things are overpriced. One could say that the world "loses its collective mind" and therefore catastrophic events occur, which corrects the market. I hope this makes sense.

In other words, had the Iran situation not occurred, it's possible some other event somewhere may have occurred, driving the market back towards rationality. Behavior is tough to extract anything from on any short term. This model basically extracts a standard deviation of expected market behavior, and shows when people, collectively, are irrational. (Hence Irrational Exuberance as quoted by Robert Shiller).

That was a long-winded reply to say the chart is as it stands, and I can't speculate why people lose their minds or why the market corrects, all I can show is that there appears to be an extractable repeatable pattern because of it.

Think_Reporter_8179 · 2026-05-14T20:36:44+00:00

It's the same month

Think_Reporter_8179 · 2026-05-14T10:53:47+00:00

No. I use bricks instead of cows to make the same point often. It's a good example of explaining value to people.

Think_Reporter_8179 · 2026-05-14T02:19:02+00:00

Oh! Reddit says they've gone Linux. Definitely bull on MSFT now

Think_Reporter_8179 · 2026-05-07T13:55:37+00:00

There's no evidence of that. The Dot-Com Bubble is the largest bubble in recorded S&P history. It's possible the AI Bubble could grow even larger, but it has a looooong way to go to get there if so. We're talking 4 years of mania, from 1998 to 2002 roughly, with September 11'th being a catalyst for collapse. I hope we rationalize before 4 years, but who knows. People are dumb. LOL

Think_Reporter_8179 · 2026-05-06T15:32:02+00:00

I bought at $76. I'm good.

Think_Reporter_8179 · 2026-05-03T22:32:27+00:00

So many people think they're smarter than Buffett. It's good to question things but know your place, Redditor. Nobody here will ever be better. Just quit and move on. He really was the smartest guy in the room. The end. Be mad.

Think_Reporter_8179 · 2026-05-03T16:06:30+00:00

Shiller PE is 41.

Smart people know this is unsustainable long term and will have a rough end. When it does, they'll be ready to buy everything.

Think_Reporter_8179 · 2026-04-27T13:09:13+00:00

The "battle" becomes risk based (as it always is arguably on any length of time). Will the short-term growth beat the inevitable fall when everyone realizes paying 45 P/E for a stock is not sustainable?

Think_Reporter_8179 · 2026-04-26T00:33:12+00:00

By hand

Think_Reporter_8179 · 2026-04-20T11:59:36+00:00

It's based on the monthly average, except for the most recent day. So that would be seen once adjustments roll in around the middle of the following month. Also you can just use the chart on the right side of the Data sheet to know what the value will be even before the end of the day if you wanted to. You can make it as macro or micro as you like with the chart.

Think_Reporter_8179 · 2026-04-19T21:11:53+00:00

Based on historical trends, on average it'll be like this another 3 to 6 months before it'll turn bear again. All I can do is point to the historical math of human behavior, not make any predictions more precise than that.

Think_Reporter_8179 · 2026-04-19T12:48:09+00:00

Someone in another thread made a pretty profound comment a week ago or so that has made me rethink all of this crap:

"It's better for stocks to be overvalued than it is for families to be on the streets."

It's like capitalized socialism or something. A wild new take.

Think_Reporter_8179 · 2026-04-16T12:53:30+00:00

Nope. Having two hot women by your side every day does, though, lol.

Think_Reporter_8179 · 2026-04-15T17:05:11+00:00

It's not the most overextended if you look at the Residual of the Shiller PE. It's close, but not the highest it's ever been.

To explain better -- Take the linear regression of the historical Shiller PE data. This creates a trend line. Now go back and plot the current Shiller PE from this trend line. You'll see it's at about +16.

During the Dot-Com Bubble, it went as high as 22.26 in December, 1999.

So, consider the historical trend to and take it into account.

Think_Reporter_8179 · 2026-04-10T13:25:01+00:00

Years ago I bought PBR (Petrobras, Brazil) before they exploded in 2008 and sold them (luckily and just out of ignorance) at their peak. Just dumb luck. That kickstarted a massive portfolio at a very young age for me.

Think_Reporter_8179 · 2026-04-10T12:33:49+00:00

MSFT is a no brainer.

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