Musings: The Anniversary of Black Monday and the Infamous PTJ “Trader” Doc

Alex here with your latest Friday Macro Musings. 

As always, if you come across something cool during the week, shoot me an email at and I’ll share it with the group. 

Latest Articles — 

Your Monday Dirty Dozen [CHART PACK] — We look at more charts showing the pervasive bearishness amongst investors; from sentiment near multi-decade lows to persistent outflows in EM stocks. We also check out seasonality, some gold charts and more.

Value Hive: Shipping Stocks, Water Assets and Jeff Bezos Interviews —  PG&E hides under the covers and shuts off power. Greece throws their hat into the negative-yielding debt parade. The short seller that screams loudest doesn’t always win, and more!

My Favorite Investing Resources — Brandon shares his favorite value investing related books, podcasts, and videos. 

Articles I’m reading — 

Here’s a slightly older but excellent long-form piece from the New Yorker, titled “Personal Best” that I happened to stumble across this week and gave it a reread (link here).

It’s written by the renowned surgeon and author, Atul Gawande (he wrote “Checklist Manifesto” which is a great book and was required reading when I consulted for the tech company, Palantir). 

I love reading about people who are beyond obsessive about pushing the boundaries of excellence in their respective fields. And this article is a great example of that. Gawande details his recent experience of using a coach to critique his surgical performance and to help him break through a personal plateau. Here’s a great section from the piece (emphasis mine). 

Élite performers, researchers say, must engage in “deliberate practice”—sustained, mindful efforts to develop the full range of abilities that success requires. You have to work at what you’re not good at. In theory, people can do this themselves. But most people do not know where to start or how to proceed. Expertise, as the formula goes, requires going from unconscious incompetence to conscious incompetence to conscious competence and finally to unconscious competence. The coach provides the outside eyes and ears, and makes you aware of where you’re falling short. 

In 1987 the NYT profiled the three top hedge fund managers of the year: John Templeton, George Soros, and Gilbert de Botton. The article is a short read with some fun market anecdotes. Here’s a snippet I liked from the Palindrome: “If you’re doing poorly, the first move is to retrench,” he says. “Don’t try to recoup. And when you start again, start small.” And “You don’t need to know everything about a situation to make money… As with any scientific thesis, you should start in a small way, adding to it if the hypothesis looks good. Then, if it passes the tests, you’ll have a big reward.” That’s excellent advice from one of the greatest at riding winners for all they’re worth. (Here’s the link.)

Not trading related but worth reading nonetheless, is a piece from Nautilus (one of my favorite science publications) exploring the fractal nature of our consciousness (you can read it here). Here’s an excerpt: 

Giuseppe Vitiello, a physicist at the National Institute for Nuclear Physics in Italy, takes a different approach to the application of quantum physics to brain dynamics (using quantum field theory instead)—but he, too, likens it to an ordering along fractal lines. Like a magnet, he says: disordered on the microscopic level until a trigger causes the magnetic “arrows” to all point in the same direction and result in an organized macroscopic system. Vitiello showed that the advent of this coherent structure—namely, of coherent quantum states—corresponds to the way fractals are represented mathematically. In other words, underlying the brain’s fractal processes is quantum coherence.

There’s a market analogy in there somewhere…

Charts I’m looking at—

Check out this chart from @pricesmatter which shows EURUSD coiling tight against 50-years of support (looks like he uses DEM for the period before the euro was created). Maybe we bounce this time or maybe we finally break through the long-term trend-line lower. 

Podcast I’m listening to — 

Srinivas Thiruvadanthai was on David Beckworth’s Macro Musings podcast last week. Sri (@teasri) is one of my favorite macroeconomists to follow. He looks at the world through the lens of the Levy/Kalecki Profits Equation which is the proper way to view the macro-financial balance sheet. 

In their talk, Sri and David discuss the safe asset supply challenge, the fallacy of composition in macroeconomics, and ways in which the Fed could ease the cost of being the world’s banker. It’s a timely interview. Give it a listen, you’ll be sure to learn something (link here).

Video I’m watching — 

In the spirit of the 30th anniversary of Black Monday tomorrow (aka: the crash of 87’). I downloaded my copy of the infamous Paul Tudor Jones (PTJ) “Trader” documentary to YouTube. You can watch it here.

We should all aspire to one day trade the markets while wearing Bruce Willis’ high top sneakers “The man’s a stud”. 

Trade I’m considering — 

I keep sharing this one but the technical and fundamental set up on the Mexican peso is just too good. The below chart is a weekly of the MXNUSD cross. It’s nearing a major breakout point, perhaps another cut at this month’s FOMC is the spark that starts the fire? 

Quote I’m pondering — 

Understanding how our brains work — our limitations, endless mental shortcuts, and deeply ingrained biases — is one of the keys to successful investing. At Baupost, we believe that it is sometimes easier to predict how investors will behave in certain situations than it is to predict a company’s bottom line. At times of market extremes, by avoiding emotional overreaction and remaining aware of our biases, it may be possible to know market participants better than they can know themselves. ~ Seth Klarman

If you’re engaged in markets then you’re playing in Keynes beauty contest whether you realize it or not. If you’re not playing the player then you’re the one getting played…

If you’re not already, be sure to follow me on Twitter: @MacroOps. I post my mindless drivel there daily. 

Have a great weekend.

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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.