Be Fire and Wish for the Wind

“Wind extinguishes a candle and energizes fire.

“Likewise with randomness, uncertainty, chaos; you want to use them, not hide from them. You want to be the fire and wish for the wind. This summarizes this author’s non-meek attitude to randomness and uncertainty.

“We don’t just want to survive uncertainty, to just about make it. We want to survive uncertainty and, in addition — like a certain class of aggressive Roman Stoics — have the last word. The mission is how to domesticate, even dominate, even conquer, the unseen, the opaque, and the inexplicable.”

– Nassim Taleb, Antifragile

AB Comments:

What does it mean to “be fire and wish for the wind” from a trading perspective?

First, consider the market strategies that get put out like candles. Selling naked puts against the S&P 500 index, for example, is a well-documented means of doing well temporarily, then extinguishing one’s trading account. So too with “reaching for yield” strategies in which steady-eddie returns are generated in periods of quiet via the use of questionable leverage. Volatility comes along and blows out the P&L candle.

Strategies that benefit from outlier moves, and thrive on the exploitation of tail risk, would be the fire in Taleb’s metaphor. Trend followers and other long gamma traders “wish for the wind” of heightened volatility and fat tail price movements.

Another way to wish for the wind (i.e. embrace volatility) is to develop trading capabilities, if not a full-scale methodology, that can profit in bearish environments. Because so many managers are long-only, it can be quite valuable, from both an OPM and absolute return perspective, to have the ability to thrive in bear markets (or at least to generate solidly positive returns, while the majority of investors get hammered).

This concept applies in life too. Some people are weakened substantially, or even see their candle “blown out” entirely, by the winds of adversity. Others get stronger — more resilient and powerful — in the presence of setbacks and challenges. The wind makes their inner fire burn hotter.

How resilient and robust is your approach to trading… and to life? Do you require idealized conditions to thrive… or can you burn almost anywhere? Are you the candle or are you fire?

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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.