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The Makings of Master Traders, Kahneman Talking Decisions, And A Tax Avoidance Value Play

Alex here with this week’s Macro Musings. As always, if you come across something cool during the week, shoot me an email at alex@macro-ops.com and I’ll share it with the group. Recent Articles/Videos — Fed 101 – AK covers the basics of how the Federal Reserve operates from its dual mandate to its three policy tools. Another Lesson In Position Sizing From The Volpocalypse Of 2018 – Tyler talks about the dangers of excessive leverage.   The Difference Between Good Traders And Great Traders: The Art of Totis Porcis – Alex talks about what makes the Trading Greats… well, great. […]

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The Difference Between Great Traders and Good Traders: The Art of Totis Porcis

The following is an excerpt from Barton Bigg’s book, Hedgehogging, where he relates a conversation with “Tim”, a successful macro investor (emphasis mine). Tim works out of a quiet, spacious office filled with antique furniture, exquisite oriental rugs, and porcelain in a leafy suburb of London with only a secretary. My guess is he runs more than $ 1 billion, probably half of which is his. On his beautiful Chippendale desk sits a small plaque, which says totis porcis—the whole hog. There is also a small porcelain pig, which reads, “It takes Courage to be a Pig.” I think Stan […]

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The Management Principles of George Soros

The following is straight from Operator Kean, a member of the Macro Ops Collective. To contact Kean, visit his website here. In the first and second articles of this 3-part series, we covered the philosophy and the investment principles and strategies of the famous Quantum Fund ran by billionaire investor George Soros. In this third article, we will cover the management principles of this legendary firm. (I) Be Part Of A Global ‘Intelligence Network’ One advantage that the Palindrome had was his ‘intelligence network’. His rise from obscurity in the early 1960s to commercial stardom on Wall Street brought him […]

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Another Lesson In Position Sizing From The Volpocalypse of 2018

Most famous fund failures have leverage at their core. That’s the true culprit for disaster —  not the actual trade ideas. Bad position sizing kills. Long Term Capital Management’s strategy involved scanning the world for bond spreads that diverged from historical values — something known as convergence trading. When spreads diverged from their means, LTCM would buy the cheap and sell the expensive bond. Then wait for prices to revert back to their “theoretical efficient” market price and make a small profit. But LTCM wasn’t satisfied with the tiny profits on the spread. They were “Masters of the Universe” and […]

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From Dalio To Dow To Thucydides And Beyond

Alex here with this week’s Macro Musings. As always, if you come across something cool during the week, shoot me an email at alex@macro-ops.com and I’ll share it with the group. Articles I’m reading — Dalio’s been doing a lot of blogging lately, which is nice. He’s a pretty smart dude. His latest write-up is on the short-term debt cycle — something we’ve written about quite a bit– and where he thinks we are currently, why, and what that means for markets. Here’s a snippet. You can find the entire article here. In the “late-cycle” phase of the short-term debt/business […]

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Withering Wages, A Poker Pro, and Lucid Dreaming with Richard Feynman

Alex here with this week’s Macro Musings. As always, if you come across something cool during the week, shoot me an email at alex@macro-ops.com and I’ll share it with the group. Recent Articles/Videos — The Market Drop — AK explains the reasoning behind this recent price route and takes a look under the hood of the economy to see if this is indeed a major turning point for markets. Better Than Amazon.com — AK takes a closer look at JD.com, one of our highest conviction holdings in the MO portfolio. Articles I’m reading — Jonathan Tepper of Variant Perception wrote […]

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The Bizarre History of Technical Analysis

AK here with this week’s Macro Musings. The February issue of our Macro Intelligence Report (MIR) is coming out in a few days. We’re going to be covering our top stocks for the Asian S-Curve theme discussed in yesterday’s email. Some of these names have 10x+ potential over the next five years. And that’s not an exaggeration. With our 60-day money-back guarantee, there’s no risk for you to come along for the ride. Don’t miss your chance. Subscribe to the MIR by clicking here. Recent Articles — Asian Explosion — We reiterate the idea of the S-curve and how the […]

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How To Profit From The Asian Middle Class Explosion

Today I want to talk about one of the most important macro themes we’re currently tracking. And then discuss some of the amazing asymmetric trade opportunities which dovetail off this secular story. But, first, this. Mauboussin wrote the following about S-curves in his book More Than You Know (emphasis mine). There is substantial evidence that industry sales and earnings trace an S-curve after a discontinuity or technological change. Growth starts slowly, then increases at an increasing pace, and finally flattens out. This diagram is useful for thinking about shifting expectations. Investors (indeed humans in general) often think linearly. So at […]

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The Confounding US Dollar

Markets work to surprise the majority of people, the majority of the time. This is because the average of everybody’s expectations is already embedded in price. Nowhere is this more true, than in the currency markets. Consensus is the ultimate killer of currency trends. The chart above is a perfect example of this, where The Economist magazine cover marked the top of the US dollar bull market at the end of 2016. The dollar has since fallen 15%. A move that hardly anybody was expecting. This is why, when analyzing currencies, we need to adopt Percival’s rule of thumb and […]

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Quant Tactics & Fat Right Tails

Tyler here with this week’s Macro Musings. As always, if you come across something cool during the week, shoot us an email at alex@macro-ops.com and I’ll share it with the group. Article I’m reading — One of my favorite traders of all time, Ed Thorp, sat down for an interview with the guys over at AQR. There’s some great stuff in their talk on quant investing and the efficient market hypothesis. (Link here) Here’s my favorite excerpt from the interview: I tell people that EMH is not true, but for you it probably is true. That is, most people don’t […]

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