What is the Perene Risk Index?

Concept

The Perene Risk Index is the Radar's appetite thermometer: a measure, from 0 to 100, of how willing domestic capital is to carry risk. If Ânima measures how the market feels, the Perene Risk Index measures what it does with its money — flow, not mood.

How to read it. Low values indicate aversion (capital retreating to what protects); high ones, appetite assumed (capital running to what prospers when the economy turns). The index crosses between regimes — risk-off and risk-on — and its extremes mark the moments when money took a position with the most conviction.

Why it matters. The information appears when it disagrees with the other thermometers. In several episodes of the archive, appetite moved before mood — capital changed position before confidence changed its mind. But this is a regularity observed case by case, not a law: when the two disagree, the divergence is what is observed, and what comes next the archive shows episode by episode.

What it is not. It is not a forecast or a recommendation. High appetite does not mean "it will rise"; it means capital is positioned for risk — which, as the archive shows, sometimes precedes the rally and sometimes precedes the disappointment.

Related episodes: Money arrives before faith (2018) · The structure turned before mood (2016) · How long does it take for mood to catch up to flow? →

Characters: Flow (risk appetite)