Animal Spirits.

Three behavioral readings on US stocks: fear from VIX option prices, exuberance from the AAII investor sentiment poll, and gambling from FINRA margin‑debt leverage. Each is shown at the 1999 dot‑com peak, three months ago (2026-02-11), and today (2026-05-11). The dashed tan line is the long‑run reference. Watch which bars run hotter than 1999, and which run colder.

Dot‑com peak 3 months ago Today (2026-05-11) Long‑run reference

Fear

VIX

Cboe Volatility Index: the 30-day implied vol on S&P 500 options, the canonical price tag on hedging the index. Daily since Jan 1990. Higher = more fear priced in.

Envy / exuberance

AAII Bullish %

AAII member sentiment survey, weekly since 1987: the share who say they are bullish on US stocks over the next six months. The 75% reading on January 5, 2000 remains the all-time high. Higher = more exuberance.

Gambling

Margin debt / GDP

Customer debit balances at FINRA member firms divided by nominal GDP. Borrowing to buy stocks is the cleanest single-number measure of revealed speculative behavior. Monthly since 1959. Higher = more leverage in the system.

Graham's warning

“Observation over many years has taught us that the chief losses to investors come from the purchase of low‑quality securities at times of favorable business conditions. The purchasers view the current good earnings as equivalent to ‘earning power’ and assume that prosperity is synonymous with safety.”

Ben Graham, The Intelligent Investor, Chapter 1, 1949.

Both of Graham's conditions are present right now. Business conditions favorable: hyperscaler capex at records, earnings prints strong, credit spreads tight. Mood calm: VIX near the long‑run median, bullishness near average, surveys saying "this is fine." Leverage past the prior peak: margin debt above the dot‑com high. The defense is the one Graham wrote in the next chapter: tighten the quality bar, not just the price bar; demand businesses that would still earn cash if today's good conditions reverted to normal.

The mood is calmer than 1999. The leverage is not. At a near‑tied CAPE (42x today, 44x in early 2000), volatility hedging is muted (VIX 18 vs 24) and bullish surveys sit at the long‑run average (38% vs 75%). Yet margin debt as a share of GDP has run past the dot‑com peak. Stated belief has decoupled from revealed behavior — the classic Shiller pattern of investors who deny being in a bubble while behaving like they're in one.

VIX: Cboe Volatility Index daily history (^VIX), 1990 to today. Today's reading is the most recent daily close. AAII Sentiment Survey, American Association of Individual Investors, weekly since July 1987. Today's reading is the most recent weekly print; the long-run average is the mean since inception. Margin debt: FINRA monthly customer debit balances (continuing the NYSE series since 2010). GDP: BEA quarterly, current-dollar. 1999 figures are calendar‑year averages or the year’s peak month, as noted on each panel. Today’s figures are the most recent monthly or rolling readings as of 2026-05-11.