Stanley Druckenmiller On Liquidity, Macro, & Margins

What’s obvious is obviously wrong… The present is already in the price… And it’s margins and capacity that matter… ~ Stanley Druckenmiller The following are some more words of wisdom from Druck pulled from an old Barron’s interview in 88’. There’s a few notes from me as well… Gauging the macro environment through three different lens (emphasis by me): We look at the market in three different ways — and each of them is flashing warning signals. First of all, we look at valuations. We use them to determine, really, the market’s risk level, as opposed to its direction… Valuation […]

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What Traders Can Learn From Professional Horse Betting

Thegreek.com, a horse racing blog, discusses the “seven deadly sins” losing horse bettors commit. Repeat these sins in your trading and you’ll suffer the same fate as the losers at the track. Here are the four most important sins to avoid:   Deadly Sin No.1: The most important thing is picking winners. Wrong! Professional horse bettors will tell you that trying to pick the winner of the race is a failed strategy and that it’s far more important to get value. What’s “value?” Consider this: A horse that you handicap as a legitimate even-money favorite should win about half the […]

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Exploit Errors To Find Your Edge

Market speculation is a zero-sum game. In order for someone to win, someone else needs to lose. You can think of the market as a collection of players… some weak, some average, and some strong. Your goal is to take action against the weak players and relentlessly separate them from their money. To do this you’ll need an edge. Now the word edge is thrown around a lot in finance, but what it really means is the ability to exploit the errors of your opponents. If you can’t find these errors, or if your opponents just aren’t making them, you […]

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A Corn/Soybean Spread Trade

The following is straight from Operator Jose, a member of the Macro Ops Hub. The Corn to Soybeans Ratio is very important to American farmers. In normal conditions, it’s a key factor that helps them decide how much Soybeans or Corn they’ll put into the ground. Both crops compete for the same acreage area. I like to think of it like this: Farmers have a portfolio, but instead of money, they have acreages. There are two assets they can choose to invest in. Either Corn or Soybeans. This key decision is ASSET ALLOCATION. Whether they want more exposure to Corn […]

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Gaia: A Booming New-Age Streaming Service Run By A Zen-Monk CEO

When the median market PE multiple is at its highest level in history and heading higher, it’s nearly impossible to find investments that have long-term holding potential. Stock market tops are a trader’s purgatory — it’s far too early to start shorting, but going long is just as much of a crapshoot. With that said, there are still some hidden value/growth opportunities that are improperly discounted by the market. To find them you just have to sift through the more overlooked areas of the market, which often means diving into the microcap space. This involves digging through hundreds of junk […]

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The Man Behind Quantum: George Soros’ Philosophy & Mindset

The following is straight from Operator Kean, a member of the Macro Ops Hub. To contact Kean, visit his website here. The Quantum Group of Funds is one of the most successful hedge funds in history. Built by uber-investor George Soros, it was only recently overtaken by Bridgewater to become number 2 on the list of the most profitable hedge funds of all time. Given Quantum’s success, there’s much we can learn studying the investment philosophy and mindset of the man who ran it. (I) Uncertainty is the name of the game! Have you ever been 100% sure about something […]

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Managing Your Losing Trades

Amateurs focus on finding trades. Operators focus on managing trades. Inexperienced traders spend far too much time on trade identification. Their misguided goal is to find the perfect trade with the perfect entry. The truth is… perfect doesn’t exist. You’re not gonna find some magical combination with a 98% win rate. Identifying a trade is really only 10% of the process. The other 90% is managing the trade. Take it from Peter L. Brandt, a legend who’s averaged over 40% compounded returns throughout his 40 year trading career(!!): Consistently profitable commodity trading is not about discovering some magic way to […]

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It’s Over

French elections are over. The Populist hydra has been slain (for now) and the world has taken a step back from a repeat of pre-WW2 political turmoil. Center globalist Macron bulldozed the “French Trump”, winning 66.1% of the vote. Macron did very well among the rich and educated white collar demographic. Le Pen on the other hand attracted the blue collar, less “sophisticated” rural working class. In essence, the vote was a battle between the “haves” and “have nots”. If you’re doing well in life, you don’t want Le Pen rocking the boat. But if you’re out of work and […]

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Europe’s Big Test

A large impetus to the next thrust higher in European equities will be the final round of French elections this Sunday. We’ve covered the rise of populism and how it affects markets for some time now…   If Macron should win Sunday, as we expect, the populist threat will likely recede for the time being. The next contentious European election is Italy’s. But that’s not until the middle of next year. The Eurozone should be safe until then. As we discussed in last month’s Macro Intelligence Report (MIR), the populist movement is cyclic with a tendency to swing back down […]

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Liquidity: The Most Important Fundamental

I’m sure you’ve heard analysts, financial pundits, and other babbling heads yabber on and on about how these markets don’t reflect the “fundamentals”. They’ve ranted non-stop about how the fundamentals prove that a bear market is around the corner. They’ve raved about valuations being stretched and how stocks will collapse any day now… If you’ve been taking investment advice from these doomsdayers, then please accept my condolences for your portfolio loss. These broken clocks should heed the words of Mark Twain: Denial ain’t just a river in Egypt. No, denial is not just a river in Egypt, it’s also the […]

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