People ask me whether I worry about how frothy the market is.
I tell them: stocks have already crashed.
Not the index. The index looks fine, held up by a handful of companies that grew large enough to offset everything collapsing underneath them. But inside the market, there is real carnage. Stocks of companies most people would describe as excellent businesses, household names, things they buy and use every week, have been cut in half, or worse. And almost nobody is talking about it.
Look at these drawdowns from all-time closing highs, price basis, as of mid-2026:
Nike: down 80%. PayPal: down 83%. Lululemon: down 80%. Lyft: down 78%. Wendy’s: down 75%. Wingstop: down 77%. The Trade Desk: down 91%. Campbell’s: down 71%. Kraft Heinz: down 70%. Charter: down 72%. CarMax: down 63%. Alibaba: down 65%. Boeing: down 55%. Disney: down 49%. T. Rowe Price: down 52%. Dick’s Sporting Goods: down 46%. Home Depot: down 35%. Pepsi: down 34%. McDonald’s: down 31%.
Read that list again. Those are not speculative tech names. Many have decades of operating history, real revenue, real earnings, and real brand recognition.
This is not anecdotal. More than half the stocks in the S&P 500 are more than 20 percent below their all-time highs, even as the index sits near a record. The cap-weighted index, dominated by a small number of giant companies, is telling you one thing. Individual stock prices tell you something different.
The index is not a democracy. The biggest companies carry the biggest weights. Their gains mask extraordinary damage underneath. You can own twenty, thirty, fifty individual stocks and experience a very different market from the one described by the headline index. The index is not your portfolio. The price of the stocks you hold is your portfolio. Watch that.
A Good Business Is Not a Good Trade
Here is the trend following lesson, and it is the same one it always is.
Price told you. It always does.
Every one of those stocks eventually gave a systematic trader an exit signal. Not because he predicted bad earnings, a strategic misstep, or a category disruption. Because price was falling and his rules told him the trend had changed. The brand did not protect you. The fundamentals did not protect you. The fact that it was a name you recognized at the grocery store or on the scoreboard did not protect you. Price told you, and the only question is whether you were listening.
The investor who held Nike because Nike is Nike, or Disney because Disney is Disney, has spent roughly five years underwater. The brand survived. He held onto the brand while the money disappeared.
This is what happens when you confuse a good business with a good trade. They are not the same thing. A great company in a downtrend still takes your money. The trend follower knows the difference. He does not need to predict which brand stumbles next. He needs a system that responds when price does, and the discipline to follow it.
The index is near record highs, while so many stocks sit deep below their individual peaks, meaning the headline index may tell you very little about what is happening in your own portfolio.
The crash is already here in dozens of individual stocks. You just cannot see it by staring at the index.
Watch your positions. Watch price. Follow your rules.
P.S. This is the kind of divergence I track in the Bull, Bear & Black Swan Report: what price is actually doing beneath the headline index, across stocks, sectors and markets. If you’d like a purchase link for the Report, just email us at [email protected]. If you want the methodology for building a system that responds to those moves, Trend Following Mastery teaches it.
Sources: Individual stock drawdowns from all-time closing highs, price basis, mid-2026, per public market data. S&P 500 breadth data per MarketWatch: more than half of S&P 500 members are more than 20% below their individual all-time highs as of this period. Cap-weighted vs. equal-weight S&P 500 divergence per standard index data.
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