We experienced a historic day in stock markets last week. On September 13th a volatility ETF $VXX traded more than and S&P stock.

Blame what/who you want (we will look into some of the reasons later), people and machines are now trading mood over fundamentals.

It all makes sense to me. I saw this happening in 2006 as YouTube was exploding and I wanted to take advantage of the platform and the alpha I thought we could find and explain it to the masses.

Here is an episode we did about $CROX, a stock that I owned at the time which was skyrocketing. We tried to capture some of the social sentiment and catalysts in our daily video:

I started Wallstrip to build a financial network on top of YouTube and the rest of the video platforms of the day. CBS acquired it within 8 months. I thought CBS saw the future as I did (ya right). It was a cool moment in time.

I remember sitting at the W hotel in Union Square as we were just getting started telling Fred Wilson (who invested) that because of YouTube and Facebook (this was pre Twitter, Stocktwits, Snapchat, Reddit etc..) the market would become a mood ring as everyone was connected. I believed there would be so much alpha in the social signals that stock investors would be able to stop paying for news and data. I believe Fred agreed and he made a lot of intros.

Flash forward 10 years and not much has changed on Wall Street. Bloomberg is still the Terminal. Twitter does not really care about the financial vertical and sells the firehose to Bloomberg (I believe a big mistake). CNBC is so bad that nobody wants to be the next CNBC. The banks continue to steal and cheat (Wells Fargo anyone?) and have many new ‘programs and incentives’ to offset zero interest rates and the regulations they brought on the rest of us.

The FED talks more than a drunk teen.

There are fewer IPO’s today than 2008.

The stock market is shrinking due to acquisitions and regulations.

Of course, over the last 40 years Vanguard has exploded and spawned a thousand copycats including robots that all sell different packages of Vanilla. They market the products as passive but it’s just really active trading of large ‘diversified’ lists with software that creates some tax efficiencies. It does work, but it it is just one system.

One thing that won’t change is people.

Everyone is connected globally and the marketers on Wall Street have created products for us to trade based on mood. The products are full of flaws and extra risks, but it is a new set of products that are obviously popular and they will continue to evolve and grow.

Get used to a new type of volatility.

PS – We will discuss all the above in great length at Stocktoberfest – October 13-15 and the schedule is now set…Come Join us.