Where Oil Prices Are Headed

Oil has been in my “too hard” bucket the last six months. I couldn’t identify any catalyst that could drive it out of its trading range. I mostly expected it to chop around which has turned out to be the case. But I figured it’s time I revisit oil and see if there’s anything on the horizon that could ignite a tradable trend in the near future. With many US E&Ps selling for what appears on the surface to be cheap, along with the oil and gas servicing industry trading at historically low relative values to the oil price; now […]

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Liquidity, The NFCI, And Leverage

If you want to trade macro, you need to understand liquidity. PTJ, Druck, Soros, Dalio — all these legends have expressed this fact multiple times. Liquidity is what moves markets. This is even more true now than in the macro heydays of the 70s and 80s. With the rise of “blind investing” in the form of passively buying and holding ETFs, the majority of investors don’t care about valuation or merit. They just auto-shuttle their excess funds to the nearest robo advisor without a second thought. This amount of “excess funds” is largely dependent on liquidity conditions. When liquidity is […]

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The Dark Side of Jesse Livermore

Jesse Livermore is commonly cited as one of the best market speculators of all time. But is this true?   On the one hand he did invent solid trading rules that have stood the test of time: Cut Your Losses: Never average down and never hope your losses reverse. Just cut them. Infinite Patience: Good trades are rare. Trade for profits, not for action. Learn Macro: Understanding general conditions is essential to market mastery. Price Action Is King: Learn to read the tape and don’t argue with markets — they know more than you. Bet Big / Sit Tight: Ride […]

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How George Soros Finds His Trades

The following is straight from Operator Kean, a member of the Macro Ops Collective. To contact Kean, visit his website here. One of the things that makes George Soros a market legend is his uncanny ability to identify lucrative trading opportunities. Let’s take a look at how he does it. (I) Look Forward! Most traders realize they need to be forward looking. But few practice it. The reality is… herd mentality and groupthink are hard forces to overcome. Instead of looking at the recent past and extrapolating into the future, Soros focuses on variables that might be misunderstood or overlooked. […]

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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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