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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Le Pen Is The Last Thing Standing Between Equity Bulls And The Promised Land

The Trump-flation narrative has driven U.S. stocks to valuations last seen in the tech bubble. On a relative value basis, Europe is a bit more appealing. As a result, hedge funds have been increasing their equity exposure to Europe since early 2017. The Fed is also in the middle of a rate hiking cycle while the ECB remains 40 basis points south of zero. The easy money is overseas. Plus there’s a record gap between U.S. and European EPS. U.S. earnings have always been larger than their European counterparts, but never by 53%…   Given those facts, it’s easy to […]

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Welcome To Macro Ops

Alex here. Our team has 3 primary directives: Assist you in reaping profits from global markets Train you in the art of market speculation Provide you with a solid community of diehard traders and investors Directive #1: Assist You In Profiting From Global Markets We’re global macro traders. That means we go anywhere and trade anything. Stocks, futures, bonds, currencies, foreign, domestic… it doesn’t matter. If there’s positive asymmetry, we’re there. The goal is outsized profits for you and the rest of our team. Let’s get you briefed on the current investment theme we’re tracking: Populism and Europe’s False Trend. […]

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Lessons From A Trading Great: Amos Hostetter

Amos Hostetter cofounded Commodities Corporation (otherwise known as CC) along with Helmut Weymar back in 1969. CC is the trading shop that produced more legendary trading talent than the Yankees have All-Stars. Alumni include: Bruce Kovner, Michael Marcus, Paul Tudor Jones, Ed Seykota and more… Hostetter was considered the wise sage and mentor of the group. He’s credited with imbuing many of these trading greats with the wisdom and knowledge they used to achieve their grand heights. Upon his untimely death in a car accident in 1977, the directors of CC commissioned one of their traders, Morris Markovitz, to gather […]

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Profiting From French Election Volatility

Attempting to predict the outcome of an election is a fool’s errand — we don’t bother with it. But that doesn’t mean we can’t make money off the vote… Over the last few weeks we’ve discussed the reasons for the rise of populism and how it’s impacted the false trend in European equities. We explained how these Soros-style false moves are dependent on narrative “tests” that either strengthen the trend or reverse it. In Europe’s case, its narrative test is arriving in the form of French elections. This year’s elections are pivotal because the French are dangerously close to electing […]

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Donald Trump: The Embodiment Of Trading Greatness

Paul Tudor Jones, Bruce Kovner, Jesse Livermore… forget about em. The only name you need to know when it comes to trading greatness is Donald Trump. He’s everything a trader should aspire to be. When it comes to having “strong opinions, weakly held”, Trump has EXTREMELY strong opinions, EXTREMELY weakly held. At the beginning of his campaign, The Donald was 2000% sure that China was a currency manipulator. But after a single piece of chocolate cake with his new buddy Xi, China was a problem no more. In fact, that piece of cake was SO good that Trump is now […]

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Do Buyers Of Options Benefit From High Volatility?

Search “options and volatility” in Google and you’ll get a dozen websites that say the same thing: option buyers want high volatility and option sellers want low volatility. Oddly enough, this old and relied upon rule of thumb isn’t completely correct. In reality, as an option trade plays out, trend has a far more powerful effect than volatility on final P&L. There are four scenarios that can occur before an option expires: Low Vol, Low Trend Low Vol, High Trend High Vol, Low Trend High Vol, High Trend The charts below illustrate the P&L of a long put in each […]

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James R. Keene — The Man Jesse Livermore Called The Greatest Trader Of Them All

While digging into old articles about James R. Keene for a piece I’m writing I came across this nugget that I have to share — it’s so good. For those of you not familiar with Keene, he is one of the most successful market operators of the late 19th century. Jesse Livermore, when talking about the trading legends of his day, called Keene the “greatest of them all”. The man made and lost fortunes many times over and lived a life full of color. Here’s the article, written by Robertus Love in The Princeton Union on July 11, 1907. Enjoy… […]

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Trading A Le Pen Win In The French Elections

Success in the markets requires thinking in possibilities. A great trader understands the permanent information deficit he’s faced with and why it makes market prediction impossible. All he can do is plan for a range of reasonable outcomes and adjust his strategy as new information presents itself.   In the latest issue of our Macro Intelligence Report (MIR), we discussed the reasons for the rise of populism across the Western world and how it’s currently impacting the Soros-style false trend in European equities. To review, a Soros-style false trend develops when a narrative is founded on untrue assumptions, and yet […]

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Current Target: Populism & Europe’s False Trend

One of my favorite sci-fi series is The Foundation Trilogy by Isaac Asimov. The book was first published in 1951 and is a grand “space opera” that takes place in the distant future. At the heart of the series (and what makes it so interesting) is the fictional philosophy of “psychohistory”. Psychohistory is a blend between mass-crowd psychology and probability theory. It’s founded on the principle that while it’s impossible to predict actions at the singular individual level, you can still successfully apply statistical probability theory at the group level to predict the general flow of future events. Asimov discusses […]

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