#119: Airbnb without the Air

S2N Spotlight

I get triggered when I read click bait. One of the guys I follow on X has a big following, and is a prolific poster, often with interesting ideas. His baiting comment is, “you’ve ALWAYS been rewarded for buying this signal.” It is a silly statement for two reasons. The first is that he doesn’t say how long you hold the buy for. The second is that if you make this statement when a market is at an all-time high or close to it, then any signal you say is a buy is going to have a positive outcome. Let us unpack if it really is true.

To answer the question, I have to create a rule to sell; otherwise, there is nothing to compare. The buy signal is when the VIX crosses below 30 after spiking above 45. It has been triggered six times since 1990, so it doesn’t happen often, and therefore I have suggested holding it for a year. As you can see from the results below in the table, the risk-adjusted Sharpe ratio is worse than a buy-and-hold strategy. So despite the fancy rhetoric, the buy signal on its own is of very limited value.

S2N Observations

Please close the door there is a draft coming through from all the air coming out of Airbnb’s share price. Down 13% after announcing weak earnings and a continued weak consumer market. This will be an interesting piece in the real estate puzzle. If landlords need to sell, then pressure will apply further along the chain.

The VIX gets all the limelight, so I thought I would share the equivalent for the bond/fixed income market. There is not a whole lot to say here other than it has been climbing .

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