Our typical publishing schedule looks something like this:

My “Market Note”: These are typically weekly, sometimes biweekly, sometimes a few times in a single week. It all depends on the action. We don’t produce fluff and filler at MO out of respect to you (example here). 

Brandon’s “Weekly Round-up”: These come out on Saturday and mostly cover the latest info on our portfolio holdings or will be a deep dive into a new company we’re interested in (example here).

Our “Trifecta Report”: These come out every Sunday and serve as a short chartbook with the key indicators we track for the major macro assets (SPX, UST 10yr, Gold, EURUSD) (example here).  

“The Consilience Report”: These come out monthly, sometimes bi-monthly, and are our longer-form reports where we go deep into a topic and share an investment that we’re particularly excited about (example here). 

We also send out regular reports on companies we’re digging into or macro developments that we believe are pertinent.

And finally, we send out Trade Alerts every time we enter a new position. These not only get emailed out but also get posted to the #mo_trade_updates channel in the Comm Center. In our follow-up email, I’ll walk you through what a typical Trade Alert looks like and what it all means.

 a typical Trade Alert email looks something like this.

The single most important aspect of making AND keeping money in the game of trading and investing is position sizing. This is 80% of the game. And it just so happens to be the thing that very few focus on, which is why there are not many consistently profitable traders/investors out there.

We get it. The technical parts of this game can be complex and dull. But so are many of the key parts of running a business. And successful speculation is a business.

Anyways, we’ll be sharing with you a number of new ways to think about how to size your positions and manage your risk. But, for now, here are the basics for how to read an Alert like the one above for those of you who aren’t yet familiar with this style of trading.

Our position sizing equation looks like this:

We take our entry price and then select a risk-point — the risk point is a level on the chart that if hit would nullify our reason for being in the trade.

We then determine how much we want to risk on the trade. Our standard bet size is 100 basis points (bps), which is another way of saying 1% of our total portfolio size (50bps = 0.5%). If we have high conviction, we’ll sometimes ramp this up to 200-300bps (2%-3%) risk.

We enter these inputs into our position sizing tool (link here) and we get the number of shares or contracts that we need to buy and sell. Here’s a short video tutorial on how to use the Position Sizing tool.

The 100bps isn’t the size of our position but the size of our risk (the amount we’ll lose should our stop be hit).

The actual position size could be 10% or more of NAV (total portfolio value). It all depends on the distance between the entry price and risk-point times the amount at risk. The wider the stop, the smaller the position, and vice versa. You can find a more in-depth explanation of how we think about risk and position sizing this short video tutorial here.

One of the things I love about markets is that there are so many ways to skin the cat.

Some are technicians, they draw lines on charts and look for patterns in the tape. Some are fundamentalists, they pore over financial statements to derive “intrinsic value” and compare it to the market to see if there’s a mispricing. Then there’s quants who systematize edges, momentum traders who chase, well, momentum. Even astrologists who buy TSLA if Saturn is in alignment with Uranus or whatever…

These people are all playing the same game but from different angles. And they can all win (except for maybe the astrologist, not too sure about them). The only thing they need to have in common is a verifiable edge. A process that produces positive expected value, aka. +EV (we’ll talk more on that in a future note).

While most investors pigeon hole themselves to a certain dogmatic approach, limiting the set of tools at their disposal. We at MO prefer to be effective Generalists. We ruthlessly test what works and what doesn’t from each and every method. Keeping what improves our +EV and discarding what doesn’t.

This is a combinatory approach to markets using a quantitative and qualitative process of triangulation. We call it the Trifecta Approach in a respectful nod to the Market  Wizard Michael Marcus who helped popularize it — though make no mistake, this is the method used by many of the greats, from Livermore to Kovner to Soros and Druck.

Using a deep understanding of macro fundamentals to identify cyclical trend location, sentiment to spot intermediate-term price dislocations (+EV entry/exit points), and technicals to ruthlessly manage risk. We’re able to stack conditional edges upon edges upon edges… producing a vastly more asymmetric process for tackling markets. Not to mention, it allows us to more effectively adapt to various cycles and market regimes.

This is the philosophical basis for how we think about investing. Within this broader framework, we run a number of different strategies. All of which have their underpinnings in the Trifecta Approach.

The MO community is the best collection of serious traders and investors out there. Bar none.

Our Slack group (aka. The Comm Center or CC for short) is where we all congregate to share investment ideas, talk trading theory, red team the crap out of each other’s positions, and much more.

It’s a crucial tool in our continual quest to push the boundaries of what’s possible. Both in trading and in life. All centered around the universal principle that Iron Sharpens Iron…

The only rule is to treat your fellow Operators with respect.

There are no egos here. Just traders and investors looking to up their game, have fun in markets, and hopefully, make a LOT of money doing it.

Please make sure to take advantage of the Comm Center.

Wherever you’re from, your background and experience is valuable to the Operator community. So don’t be shy.

The Comm Center is where you will also find fresh bulge bracket banking research. If you’re looking for the latest BoFA fund manager survey or Goldman’s take on the market you’ll find it in the research channel.