Traders As Modern Day Hunter-Gatherers

Entering the market is like entering an entirely different world. This world functions nothing like modern society.

Modern society has laws and social norms in place to protect you. If you screw up, you have a safety net. People will generally reach out and help.

Modern society is cushy. Even people who are disabled, suffering mental illness, or are unable to care for themselves in other ways still get by. (Maybe not as well as we’d always like, but far better than at any other time in the past.)

Markets aren’t like modern society.

They’re much closer to being like the world in its most natural state.

The strong prey on the weak.

You live or die based on your own ability.

While the system can sustain a vast array of life and species for large spans of time, each player constantly faces the risk of death. Markets are unforgiving and brutal, yet incredibly abundant places to thrive — just like natural ecosystems.

In this world… traders are the modern day hunter-gatherers.

Hunter-gatherers sustain themselves by staying in sync with the large, complex ecosystem they’re apart of. This ecosystem is full of both opportunities and threats. The hunter-gatherers don’t control anything, but instead seek to achieve harmony with the changes around them.

A key component of long-term survival in the wild is adapting and evolving. Failure to adapt to the changing landscape means you won’t be fed.

The same goes in markets. Markets trade a lot differently now than they did in 1980. If you don’t adapt your strategy along the way you’ll become irrelevant. You’ll starve.

Hunter-gatherers don’t try to extract every last bit of value from a situation. They wouldn’t kill all the deer in a herd even if they could. What would they do with all that meat? There’s no fear of “leaving money on the table” as long as they get what they need to thrive.

Instead of maximizing return, hunter-gatherers seek to achieve satisfactory returns while minimizing risk. They focus on risk-adjusted return. Risk is easily forgotten in a civilized society where nearly everything is already idiot-proofed. But risk has to be at the front of a hunter-gatherer’s mind.

Hunter-gatherers don’t have to win all the time. They just need to win often enough to stay fed. In the markets, you can make billions by calling it right just 55% of the time.

Since the world is abundant, hunter-gathers’ timeframes are shortened. Unlike farmers or industrialists, hunter-gatherers focus on the next season (or maybe next few if they build up stores to ride out the lean times). But beyond that, why worry? The world will provide endless opportunities for someone who can live off the land. There’s never a “fear of missing out”.

As a trader, embracing this hunter-gatherer mindset will align you with the reality of markets. Doing so will help you take your returns to the next level.

The above passage is straight from Operator Biren, a member of the Macro Ops Hub. To learn more about the Hub and how you can join our Operator team, click here.

 

Traders As Modern Day Hunter-Gatherers

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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.

AK

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.