[1/5] Macro Ops’ Market Outlook: Our 2021 Non-Predictions

We’re cognitively wired to latch onto single or binary outcomes when thinking about the future. Reality is much messier than that. “Man Plans and God laughs” as the saying goes.

This is why we don’t care so much for the tradition of making annual market predictions about the coming year. They’re unproductive in the least and at worst, detrimental to our goal of playing the market we’ve got instead of the one we wish we had. Plus, haven’t you noticed that those who speak loudest on what’s to come, are almost always those who’ve been most wrong about what’s just passed?

“An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today” ~ Laurence J Peter

Dunning-Kruger is a hell of a drug, I get it…

Anywho, at MO we find it much more constructive to focus on what’s actually driving markets today versus playing craps on where the S&P will be in 9-month’s time.

This is because in markets, as in all complex systems, initial conditions matter… they matter a lot. Economies are big lumbering beasts, capital flows persistent rivers, policymakers plodding geriatrics. The underlying drivers of a market cycle rarely change. But our perceptions and narratives spun to try and explain them do, and sometimes quite rapidly so.

Here’s the kicker though… most spoon-fed narratives are wrong. They’re the fast-food of the common knowledge game; popular with the masses, great with ketchup, and terrible for your (financial) health. Going back to initial conditions for a second. Trends in motion tend to stay in motion — you know, Newton and all that. But sometimes major phase shifts do occur and recalibration is needed.

You could say that 2020 was a year of major phase shifts. Some recalibration is certainly needed. The game has changed and in some big ways to boot. But, also, some of the key drivers have stayed quite the same.

In the following series of daily posts over the next five days, we’re going to run through our initial conditions. We’ll cover the major phase-shifts and the riveted trends. And through this exercise, we won’t arrive at a prediction for the 10yr yield in November or the price of TSLA stock come summer. But we will be able to stand on firmer ground in knowing, within reason, what’s driving prices today as well as what will likely be driving them tomorrow.

We’ll be able to then make probabilistically weighted bets. Understand what matters and what to look out for. And adjust fire when needed. It’s like what that author guy said… you know, the one who wrote about angry grapes:

“… to find where you are going, you must know where you are.” ~ Steinbeck

This may be less sexy, but it’s more profitable. And that’s what we care about. We’re fine not getting style points, as long as we bring home the risk-adjusted bacon at the end of the day. We’re big bacon eaters at MO.

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Brandon Beylo

Value Investor

Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


Investing & Personal Finance

AK is the founder of Macro Ops and the host of Fallible.

He started out in corporate economics for a Fortune 50 company before moving to a long/short equity investment firm.

With Macro Ops focused primarily on institutional clients, AK moved to servicing new investors just starting their journey. He takes the professional research and education produced at Macro Ops and breaks it down for beginners. The goal is to help clients find the best solution for their investing needs through effective education.

Tyler Kling

Volatility & Options Trader

Former trade desk manager at $100+ million family office where he oversaw multiple traders and helped develop cutting edge quantitative strategies in the derivatives market.

He worked as a consultant to the family office’s in-house fund of funds in the areas of portfolio manager evaluation and capital allocation.

Certified in Quantitative Finance from the Fitch Learning Center in London, England where he studied under famous quants such as Paul Wilmott.

Alex Barrow

Macro Trader

Founder and head macro trader at Macro Ops. Alex joined the US Marine Corps on his 18th birthday just one month after the 9/11 terrorist attacks. He subsequently spent a decade in the military. Serving in various capacities from scout sniper to interrogator and counterintelligence specialist. Following his military service, he worked as a contract intelligence professional for a number of US agencies (from the DIA to FBI) with a focus on counterintelligence and terrorist financing. He also spent time consulting for a tech company that specialized in building analytic software for finance and intelligence analysis.

After leaving the field of intelligence he went to work at a global macro hedge fund. He’s been professionally involved in markets since 2005, has consulted with a number of the leading names in the hedge fund space, and now manages his own family office while running Macro Ops. He’s published over 300 white papers on complex financial and macroeconomic topics, writes regularly about investment/market trends, and frequently speaks at conferences on trading and investing.

Macro Ops is a market research firm geared toward professional and experienced retail traders and investors. Macro Ops’ research has been featured in Forbes, Marketwatch, Business Insider, and Real Vision as well as a number of other leading publications.

You can find out more about Alex on his LinkedIn account here and also find him on Twitter where he frequently shares his market research.