After a week or two of relentless risk on behaviour, culminating in the NASDAQ hitting and all-time high, there is a faint hint of risk-off behaviour today. EM currencies (RUR, MXN, ZAR) are being hit hard, the DAX and MIB are down steeply, oil (CL) is down 2.4%, GC …

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Focus on controlling losses

In trading, it’s very important to anticipate what will happen, and avoid even thinking about what should happen. Even if you can’t help thinking about what should happen, and are seduced into action by the thought, at least have the humility to reverse your …

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Summary

You kept your portfolio pretty much delta neutral, and you proved that this squelched all the risk, and all the return too.

Gradually, as it became apparent that investors perceive recent changes as signalling that the pandemic is coming to an end, you took off the risk-off hedges. You …

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The George Floyd riots continued over the weekend but made virtually no difference to the US markets. US stock averages are a bit muted, vs ROW. Transports & SPX are flat as of now (16:06 2020-06-01). Other markets did somewhat better, especially Latam.

Generally, everything is risk on. TLT, which …

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Risk On/Risk Off behaviour still seems to dominate. The former still seems to be in the ascendance. I felt like shorting a few of the more obvious fraudulent enterprises, but they are just the ones the rocket up at any hint of a recovery. It really doesn’t seem …

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Trying to keep delta neutral wrt SPX.

Some exposure to commods via PAAS, VALE, KL, GLD but very little.

Hanging onto Incredible Hulks trade, but yet to see much return (grrr, Kuppy!).

Slight exposure to energy via RDXUSD.

Really hanging on for markets to get rational.

I’m desperate to …

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I love long-form interviews, especially when driving or otherwise unable to read. I listened to The Econtalk Episode in which Russ Roberts talks to Martin Gurri about his 2014 book, “The Revolt of the Public”. You can read the highlights here.

The basic thesis is that Poltical Taylorism has had …

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Kelly was a smart guy who worked with the legendary Claude Shannon at Bell Labs. He worked out an optimal betting strategy for games of chance. This can be applied to investment, where an investment decision has a payoff probability distribution where a holding (e.g. of stock) will produce …

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I’ve been very bearish about ‘purpose built student accommodation’ for a long time. The UK has been following the US in tertiary education, just as it always follows it in primary and secondary education.

I have some experience of renting to students. It’s not easy, and it’s …

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How to explain the policy response to Covid-19

This article explains why a government would spend perhaps seventeen times as much on Covid-19 as on other health spending, on a comparable basis.

The arguments against lockdown are presented in Toby Young’s new website.

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