October 2026
Does buying options before earnings pay? Across 459 US earnings reports, a call lost 42.8% on average at real prices.
| Claim tested | Finding | Verdict |
|---|---|---|
| Buying a call before a US earnings report and selling it at the next close pays | −42.8% on average at real prices, 459 reports; margin of error −66.6% to −19.1%. 17% of the calls made money | Does not hold |
| Selling the call in the morning after the report beats holding it to the close | The main rule (sell when the bid reaches 1.5 times the price paid): −0.7 percentage points (pp) against holding, margin of error −10.3 to +9.0 pp. The other two rules: much the same | No improvement |
| Calls on companies that usually beat analysts' profit estimates do better | +14.7 pp against the other companies, margin of error −50.7 to +80.1 pp: no difference these trades can show either way | Can't tell yet |
October 2026
In the year after hitting their own all-time high, small US stocks lagged on average - the median stock didn't
| Claim tested | Finding | Verdict |
|---|---|---|
| Small US stocks have a weaker year after an all-time high, once the companies that later failed are counted | Up 6.8% on average a year after a record, against 10.9% after any day; with the record dates shifted at random, a gap this large came up in 2 of 100 tries. It depends on the loss assumed for a failed company: with none the gap is 2.2 points, within chance, with a total loss 6.7 | On average, yes |
| The median small US stock has a weaker year after an all-time high | Median +3.7% a year after a record, +3.4% after any day; the stock was up a year later 55% of the time against 53%. Over 3 years it did lag: +7.1% against +12.8% | No: about the same |
| Large US stocks have a weaker year after an all-time high | 11.4% on average a year after a record, against 12.0% after any day, within chance. Across all stocks from 2003 the gap is 2.1 points, on the edge of chance. Over 3 years they did lag on average: 34.5% against 38.6% | No clear gap |
| US companies not yet profitable lag most after an all-time high | 1.9% on average a year after a record, against 7.8% after any day, the widest gap of the three profit groups; a gap this large came up by chance in 3 of 100 tries. The median one did better after a record: −3.8% against −9.8% | On average, yes (side result) |
October 2026
After an all-time high, the S&P 500's next year looked like any other - for small caps it didn't
| Claim tested | Finding | Verdict |
|---|---|---|
| An all-time high in the S&P 500 is followed by a weaker year | Since 1988, a year after a record close the S&P 500 was up 11.7% on average, against 10.3% after any day, and higher 83% of the time against 81%. The gap is within chance, with dividends too | No: about the same |
| …in the Nasdaq-100 and the Russell 1000 | Nasdaq-100: 22.3% against 17.9%; Russell 1000: 11.9% against 10.5%. Both gaps are within chance | No: about the same |
| …in small caps (the Russell 2000) | Up 2.8% on average a year after a record, against 9.7% after any day; higher 62% of the time against 71%. With the record dates shifted at random, a gap this large came up in 3 of 100 tries. Counting only the first record of each run: 7.9% against 9.7%, within chance. Check it yourself → | Weaker, on the edge of chance |
October 2026
The 30-year Treasury yield is near 6%, as in 2000 - but heading the other way
| Claim tested | Finding | Verdict |
|---|---|---|
| The 30-year Treasury yield at 6% marked the 2000 stock market top | The S&P 500 peaked on 24 March 2000, the day the 30-year closed at 6.00% | Correct, to the day |
| Today's bond market looks like 2000 | In 2000 the 30-year was falling to 6% (from 6.75% in January); today it is rising (from 4.73% a year ago). Only June 1999 looked like today | Wrong direction |
| A new high in the 10-year Treasury yield hurts stocks over the next year | After a first new high in the 10-year yield, the S&P 500 was higher a year later 68% to 85% of the time, depending on which of the four definitions in the study's Table 2 is used. After any day: 75%. None of these differences is bigger than chance alone would produce. Check it yourself → | No consistent effect |
| …over the next 3 months | Higher in 46% to 62% of cases against 66%; weaker after 1 and 3-year highs, not after the others | Mixed |
| Stocks are as expensive today as in 2000 | CAPE 41 today, 42 in June 1999, 43 in March 2000; higher in only 16 months since 1871. Forward P/E (FactSet 19.0) sits near its last-10-year average | Close, on CAPE |
| A low forward P/E means stocks are cheap | The forward P/E fell from 20.4 to 19.0 while the S&P 500 rose 2.0%: the fall came from higher earnings forecasts (+9.3%), which assume +32% growth in 2026. A year like that from record earnings happened since 1962 only in 1994 and 2021 | No: higher forecasts |
October 2026
Analyst upgrades move stocks on the day, then stop
| Claim tested | Finding | Verdict |
|---|---|---|
| An upgrade keeps paying after the day | +1.7% on the day, then zero over 45 sessions | No lasting edge |
| More promised upside means more return | Median promise from −4% to +39%; median 12-month return +11% to +13% in every fifth | Does not hold |
| Some firms' calls are worth more | A firm's past accuracy does not predict its next call | Does not hold |
| Less liquid stocks react more | About 30% stronger on the day; gone afterwards | Holds, on the day |