Category: Theory And Training
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Bruce Kovner On Listening To The Market, Politics, & Risk Control
The following is a fantastic speech from Bruce Kovner on Caxton Associates’ 20th anniversary. Kovner shares a plethora of trading wisdoms including the three most important contributors to his hedge fund’s success. You can read the original speech from 2003 here. ~~~~~~ To all my colleagues, to friends and associates who have worked and invested…
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Trading Wisdom From A JP Morgan Vet
Every once in awhile a few gems will surface through Wall Street’s noise. Such is the case with a departing note from Jan Loeys, a senior strategist from J.P. Morgan who has been at this game for over 30 years.In his final note, Loeys shares his thoughts on all the hot issues in finance and…
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Ed Thorp’s Trading Strategy Explained
Ed Thorp, the father of quant investing, might be the most impressive market wizard. He turned seemingly random processes into predictable events, transforming the art of speculation into a science decades before Wall Street’s quants became mainstream.His domination in the financial world began in the casino. Thorp figured out how to beat the most “unbeatable”…
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Hedge Fund Manager Mark Sellers On Becoming A Great Investor
This is a killer talk I came across from Hedge Fund manager Mark Sellers, speaking to some Harvard MBA kids on what it takes to make it in markets. Regardless of whether you consider yourself a trader or investor, Mark’s “seven traits” apply.Enjoy… First of all, I want to thank Daniel Goldberg for asking me…
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Daily Speculations: Unveiling the Randomness in Investment Returns
As traders, one of the most important traits we can adopt is humility. We have to embrace our fallibility. Markets are complex systems. We cannot know all the relevant variables and causal relationships. Therefore, when we make a market prediction or place a trade, we can’t truly know if the subsequent outcome occurred for the…
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Separating Signal From Noise In Markets
There’s not much information to get. The most important variables in global macro are the economic conditions and how central banks respond to those conditions. To get that information, I read the paper, look at the data, watch what the officials say, and try to read between the lines. From an actual trade point of…
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Leveraging the Macro Time Frame in Market Analysis
There is timing in the whole life of the warrior, in his thriving and declining, in his harmony and discord. Similarly, there is timing in the Way of the merchant, in the rise and fall of capital. All things entail rising and falling timing. You must be able to discern this. In strategy, there are…
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Ray Dalio’s Portfolio Allocation and Investment Strategy
Let’s break down Ray Dalio’s investment strategy and how he’s able to deploy a portfolio allocation that reduces a majority of his risk while keeping his returns high. Ray Dalio’s Asset Allocation Strategy Here’s an excerpt from Ray Dalio’s recent book Principles recounting his biggest aha!” moment in investing. This epiphany is what helped Dalio develop…
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The Label Stupidity Loop
“I’m a Democrat… I’m a Trump Supporter… I’m a Value Investor… I’m a Capitalist… I’m a Neo-Keynesian… I’m an Atheist… I’m a Swiftie… I’m a… I’m a… I’m a…” Humans love labels. We don them proudly, wearing them like sports jerseys. We proclaim our chosen identity to anybody that’ll listen. We want everyone to know…
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Measuring Market Liquidity: The NFCI
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…