Tyler here with this week’s Macro Musings.
As always, if you come across something cool during the week, shoot me an email at firstname.lastname@example.org and I’ll share it with the group.
Recent Articles/Videos —
Peter Brandt On Drawdowns — PLB talks about how to manage those nasty market drawdowns.
Jack Schwager On Risk Management — Jack explains why it pays to focus on your exits over your entries.
Did Wall Street Kill Toys “R” Us? — Distressed debt funds are cold blooded…
Article I’m reading —
How an international hacker network turned stolen press releases into $100 million — This is the craziest insider trading story I have ever read. If you got 15 minutes to spare check this out. It’s a highly entertaining read about how a few Eastern European hackers were able to get away with seeing the news before everyone else for years on end. These guys made HFT news algos look late to the party!
Chart I’m looking at —
The US stock market is back at all-time highs. We’ve been making this call for months now based off of the US macro fundamental picture, relative strength in the USD, and favorable liquidity conditions. Now that we are here it’s time to ask what’s next. The quant metrics would tell us that more highs are ahead. You can see the table above from @oddstats that a breakout in the S&P 500 is usually followed by more all-time highs.
We’re positioned accordingly with almost all of our open risk allocated to US stocks.
Podcast I’m listening to —
Naval Ravikant: The Angel Philosopher on Investing, Making Decisions, Happiness and the Meaning of Life [The Knowledge Project Ep. #18] — This one has been recommended to me so many times by pretty much everyone on the internet. And after listening, I will join the chorus as well. Naval’s a beast of a thinker and has so much wisdom to share. I love his mental models for making critical decisions which he explains in great detail on this podcast.
Trade I’m considering —
Gold has accumulated an extremely short spec position over the last few months.
Even though we are long-term bearish on gold, a short-term long looks attractive here. Once the price action starts to reverse, all of the shorts will have to rush for the exits creating a sharp countertrend rally. It’s worth a punt.
Quote I’m pondering —
The main purpose of the stock market is to make fools of as many men as possible. ~ Bernard Baruch
This has certainly been the case this summer! So many top callers… and now none of them left standing.
That’s it for this week’s Macro Musings.