Notes on Q1 Performance, Gold, Ethereum, EURUSD…

He also taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.

That’s from Bruce Kovner talking about one of the many important lessons he learned from his mentor, Michael Marcus.

We’re going to dissect that some here in a bit. But I want to first get through some quick accounting stuff. Then the rest of this note will be a short stream of consciousness, covering some things and trades that are top of mind this morning.

First, the numbers…

The MO portfolio finished the quarter up roughly 25% year-to-date. That’s down from a YTD high water mark of 39% but still not too shabby.

Our overall execution has been decent, though I think we can improve on the way we think about and carry out hedging — that’ll be an area of focus for us going forward.

Our higher-than-normal portfolio volatility is the result of carrying Micron (MU) DOTM calls that have grown into a monster position. Which is a problem that we don’t mind having, but greater portfolio volatility should be expected as the calls get closer to in-the-money.

In other news… I’m trading in the World Cup Trading Championship this year. I’m in the Futures division. It’s a bucket list item for me to place in this thing. I competed years ago and was in the top three for a while but then blew out.

It’s just a fun thing and I don’t have that much time to devote to it. So I’m maybe spending 1-2 hours a week on it at most.

I got a late start. The tournament kicked off on Jan 1st but I didn’t get my account up and funded until mid-Feb. I’m up 16% at the moment and have my work cut out for me if I’m going to get into the top 3 (first place is up 83%).

I think it’s doable, as the strategy I run attempts to exploit Pareto’s Law to the max. In other words, its returns are very bunchy. I go through long periods of performance chop followed by wild bursts in returns off just a few trades.

The strategy is an aggressive macro discretionary one. It’s one I started trialing last year. Here are the 9-month return and performance metrics via FundSeeder.

I won’t get too much into the specifics here. They really aren’t that important. But the basis of the strat is to take multiple swings at key intraday technical inflection points in an effort to catch multi-day/week swing moves.

What is important and where the real edge comes from, is on the trade/risk management side. The strategy is centered around what Kovner said he learned from Marcus… being wrong, being wrong, then doubling your money…

Que some words from Michael Marcus:

At key intraday chart points, I could take much larger positions than I could afford to hold, and if it didn’t work immediately, I would get out quickly. For example, at a critical intraday point, I would take a twenty-contract position, instead of the three to five contracts I could afford to hold, using an extremely close stop. The market either took off and ran, or I was out.

Using inflection points to get large size on with little risk is key to this strat, and to any aggressive trading strat.

I’ll flesh this strategy out more in our Slack soon. In the meantime, I’ll be posting my trades (entries, exits, etc…) as well as updating my weekly performance numbers in our #intradday_swing channel or I may just create a new channel specifically for tracking this.

On another note, it was pointed out to me that the Ethereum fund (ETHE) is actually trading at a discount to NAV now (chart below).

In light of this fact, we will be putting this trade on in the MO port, likely today. The technicals of the setup are solid. And if we’re entering a general market risk-on Buy Climax as I’ve been suggesting this past week, then the crypto space should lead the way.



I also continue to like the action in Palladium. The chart is bull flagging after a strong breakout from an extended consolidation period. And it remains firmly in a Bull Quiet regime (h/t to LeeB in our group for being all over this one).

This trade has a host of tailwinds behind it. The market is in deficit, positioning and sentiment are completely offsides, and positive seasonality returns in April (the left chart is spec and commercial positioning, the right chart is seasonality).


Other than that, our long gold trade we entered yesterday is off to a good start. We want to see it hold strong into the close today. I’m toeing the waters with some short dollar trades. I got stopped into a long EURUSD last night in my WTC account. We may add a small starter to the MO account if it holds into the close.

That’s it for now. We’ll be out with some trade alerts later today as we execute them.

Your Macro Operator,


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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.