Why it’s not (necessarily) disingenuous for a trader to only follow up on winners.

There’s a recurring meme that FinTwit peeps are so cynical that they simply call trades randomly and then retweet only the ones that work.

That’s not my read on what’s happening, so what is?
Okay so first off there are 2 types of positions.

Well, for me.

I’m like Level 3 so presumably there are others I haven’t unlocked.

Anyhow — let’s call them “gravity trades” and “surf trades” since that seems fun.
A gravity trade is where you’re just like betting on structure. “QE isn’t actually deflationary which we’ll find out within a couple years which makes bonds good, eventually” or that kind of stuff that I occasionally yammer on about.

Anyhow these aren’t the point.
There are also “surf trades” — a point-in-time read that you think there’s a wave coming and you’re gonna try to ride it.

It’s literally like saying to the other paddling out there, “hey I’m gonna try and catch this one.”
How long will you ride it? I mean who knows. Honestly, sometimes you try to catch it and just fail.

Sometimes you get a piece of it but then wash out early. Just kinda depends on how good your entry is and how experienced are, really.

So there’s a lot of that on here too.
And the reason people don’t follow up on those when they wash out is that they’re just not that interesting.

“Hey Ima try to ride this.”

“Sick brah good luck.”

“Dudes I wiped out let me give you my notes on it.”

^ nobody wants your failure notes when you wipeout.
So I think that’s why sometimes a lot of ideas just go cold.

But that doesn’t mean your radical surf friend isn’t catching some good waves every now and then.

Even journeyman surfers can do alright out there once they learn how to not get pounded into the sand over and over.
So here’s how that might work.

Let’s say you think reflation is bullshit (as I do) and you see this big ass oil channel and one day it breaks down, right?
And you’re like, “damn that’s interesting I was thinking that could happen because of my b̶i̶a̶s̶ thesis.

So you start watching it a little more and it bounces up and retags the channel.

So you’re like, “fuck it I’m gonna try and catch a piece of this thing.”
And let’s say you get a half decent entry that’s not the best but does alright.

Then when the thing starts to get strong again you just peace out.
Now - is it the legendary wave ride you wanted? No but you shredded a bit and like... whatever it was a good time.

And since it's trading in a range, you can ride these same conditions a few times now, just like a day at the beach where the water and weather are just so.
Now of course it doesn't always go your way - sometimes you wipe out.

Like say you try to enter here and it goes okay but then it reverses fast so you close it at a small loss figuring you misread it.

You just don't ride them all perfect, ya know?
And what you're really playing for in the end is that epic ride - where your big thesis plays out and one of these breaks down.

But in the meantime you just shred it up a little bit and tootle around.

A good surfer can have a good time and make a bit of money like this.
And if their big idea plays out and it breaks down, that's awesome! One of the rides is just real dope.

And if not and it breaks up, you pack it in and go find some new surf to ride.

It can still be a good day of surfing even if you don't ride a monster that day.

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More from @coloradotravis

1 Apr
Low interest rates: who benefits?

People like to rant about financial repression, but I haven't seen many walk out an understanding of *why* we're doing this.

Like - if it's so terrible, how come we keep doing more of it?

Let's look at who it's good for, and who it's not.
First: who it's not.

It's not good for **new entrants** - this applies to both the individual and to businesses.

Let's look at an example of each to understand why newer players are disadvantaged.

First, the individual.
Read 15 tweets
28 Mar
Every generation has their Great Dream narrative.

For the Boomers, it was a 'be here now' attitude that manifest itself in a carpe diem attitude that their parents (children of the depression) found unfathomable.

Ultimately it's just a story, however.
The Great Dream flourishes for a time as creates confirming instances: Woodstock and free love and Wall St. and the go-go cocaine-fueled 80s.

But in the end, as the generation fades, we are left looking at the pieces that didn't work.
For the carpe diem attitude, while liberating, is not without consequence: oceans filled with plastic, reliance on social systems to plan for the future on our behalf, a hyper-financialized economy.

Carpe Diem is, in the end, just a story not a Final Truth.
Read 5 tweets
28 Mar
The cake is a lie.

A conformist's guide to understanding what contrarians are up to, and why they're such a pain in the ass.
There seems to be this idea out there that being contrarian is like... I dunno, some weird thing where you just vote against the herd no matter what.

Well that's ridiculous.

Blindly going against the herd is how you get trampled in a stampede.
By my read, being contrarian is more like... a decision to be both deliberately 'simple' with one's thinking, and also completely unconcerned with how others view that simplicity.

It's a decision to not take mental leaps even when social optics of doing so are favorable.
Read 6 tweets
18 Mar
The Book Of Crayon

Chapter One: Wax
We start small and adrift in an ocean of lights and sound.

Instinct’s first job is to save us, and mostly it does.

Then we’re pulled, gently, toward sense making. And we learn to detect currents in the vast sea of sensation.
Currents take us to the Field of Forms - the soil is rich but nothing grows, for the farmer has only just arrived.

Here we must diligently sow the earth with the little packet of seeds that will flower into shapes and patterns.

For a time there is only working the fields.
Read 17 tweets
17 Mar
Y'all remember this - the "Fed testing 55% fall in equities" thing?

Curious, right? I mean... banks don't hold equities and while yes their stock price is somewhat relevant that doesn't seem like enough to warrant this kind of wargaming.

So what might?
Let's say you knew you were going to shove a truckload of cash into the banks (via stimmy), and that could already be slightly awkward.

And you, the regulating body, might need to turn some knobs in order to make sure stuff doesn't break.

You'd want to turn them enough...
More specifically, you don't want to make just enough allowances to receive the stimmy (which could, itself, cause unknown externalities due to its largess) and then be right back at the table turning knobs again a month later.

Not a good look.

So you turn to your banks...
Read 4 tweets
17 Mar
I'd just finished regaling the tavern with another of my famous poems (which everyone whose drinks I bough agreed was exceptional) when a voice called out from the back of the bar,

"Yeah well. You wanna be right or you wanna make money?"
I wiped my beard and peered through the smoke at the man. He had the looks of a fellow who'd had to live by his wits for a long time, and... well let's just say he wasn't dead yet.

Glanced at my sword. Decided against it. There'd be enough bloodshed in the days to come.
I reached down, tore off half my loaf of bread, and tossed it to him. He caught it deftly then looked up at me suspiciously.

"Well," I called out, "you gonna come have a seat with me and butter that thing or eat it over there in the cold?"

He slunk over, reluctantly.
Read 4 tweets

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