When is There Blood in the Streets?
“Buy when there is blood in the streets” - Baron Rothschild
While Warren Buffet may have made the quote above famous, the words were actually spoken by the British nobleman. When investors panicked following Napoleon’s defeat at Waterloo, Rothschild took the contrarian view, stepped up and bought stocks. He made a fortune. As investors today, how can we tell when there is blood in streets?
One way just might be the CNN Fear & Greed Index. This Index is published each weekday. It measures seven indicators on a scale from one to one hundred as a way to gauge the “mood” of the stock market. A measure between one and twenty-five is considered to be an extremely fearful environment. Investors feel neutral with a score of fifty. Extreme Greed sets in with a tally over seventy-five.
As you can see from chart above the current reading (as of 4/23/26) the Index is well into the Greed range. Hard to believe considering the conflict in Iran continues. Isn’t there blood in the streets? One month ago, shortly after the bombs dropped, the index registered a 14 or Extreme Fear. It is amazing how quickly the mood changed from negative to positive. Markets often climb a 'wall of worry,' where the resolution of uncertainty (even if the news is grim) is preferred by investors over the unknown.
Equally amazing is that we have whipsawed between Fear and Greed three times in the last twelve months. The line graph above illustrates the Index in a timeline. The very beginning of the line shows the Index exiting Extreme Fear just as the tariff tantrum concerns subsided. The red box highlights a reading of 4 - a level of extreme despondency rarely seen. Most likely, no one even remembers what happened six months ago. At the time, Bitcoin was crashing from a peak of $126,000. The government was in the middle of the longest shutdown on record. Tariff fears reared their ugly head again as China had 100% tariffs placed on US imports. Finally, Wall Street began to question profitability of the preponderance of firms announcing multi-billion-dollar spending on AI capital expenditures.
Ironically, the fear last year was more intense than the fear attributable to this year’s actual conflict. Even stranger: If you had bought the S&P 500 on April 8, 2025, you would be 35% richer today.
Would Mr. Buffet or Mr. Rothschild use the Fear & Greed Index as a timing tool? Probably not. While it is a helpful pulse check, these legends would likely wait for even grimmer conditions before committing significant capital. They would be looking for just a little more blood in the streets.
Disclaimer
This material is provided for informational and educational purposes only and is not intended as, and should not be construed as, investment, legal, tax, or accounting advice. The information is general in nature, does not take into account any individual’s objectives, financial situation, or needs, and should not be relied upon as a recommendation to buy, sell, or hold any security or to engage in any particular investment strategy. Nothing herein constitutes an offer to sell or a solicitation of an offer to buy any security or investment advisory services, nor is it intended to create an advisory relationship. All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results, and no assurance can be given that any strategy will achieve its objectives. Any forward-looking statements, opinions, or estimates are as of the date indicated and may change without notice. Information has been obtained from sources believed to be reliable; however, accuracy and completeness are not guaranteed. If index, benchmark, or third-party information is referenced, it is provided for illustrative purposes only. You should consult with a qualified professional regarding your specific circumstances. Additional information about the adviser, including Form ADV is available upon request.
