Clicking our Ruby Slippers Won’t Fix Volatility
The sky is green. If you’ve ever lived in the Midwest, you know what that means. A green sky isn’t poetic, or picturesque, it’s a warning. The kind that sends people running for the basement. Something big and unpredictable is coming, so you better be ready.
That’s where we are in today’s market environment. One day the bears rule, the next, the bulls charge in. One week it’s confrontation and the next, compromise. Through it all, investors, CEOs, and boards are left trying to make cents out of nonsense, piecing together strategy in a market where clarity is elusive. It’s natural to fixate on market volatility. We ask in all earnestness: “Why is that stock going down?” “Why is it going up?” “Why, why, why???”
Analysts make it all sound so simple. But the reality is anything but simple. Markets don’t move because of one thing. They move because of many things, often invisible or contradictory, all at once.
A company can beat expectations and raise guidance yet still see a sell off. Gold can rise on fear, fall on profit-taking, then rise again on technicals. Markets are driven by fundamentals, sentiment, algorithmic flow, positioning, technical levels, and sometimes, just sheer noise. Even if you knew the exact catalyst, that knowledge doesn’t tell you when to buy, when to exit, or how to size the risk.
The truth is: no one fully knows the “why” about much of anything when it comes to stock movement. Not the traders. Not the talking heads. Not even the executives. What matters more than stock price fluctuation is how a company operates and how it communicates in this new era of TOTO (tariff-on, tariff-off) uncertainty.
In Kansas, you don’t chase the wind, or run in the opposite direction when the skies turn green, you prepare for it. The same applies here. Dorothy from the Wizard of Oz knew it instinctively when she said: “Toto, I have a feeling we’re not in Kansas anymore,” an ironic line if there ever was one. Toto, like any dog, has no real concept of time and place, let alone that he transitioned from b&w into technicolor. He probably just barked and carried on. And maybe that’s the lesson.
