One of the best lessons an older trader taught me was. “If everyone is anticipating negative news & the stock doesn’t drop when the negative news hits, go long”.

The inflation scares and negative headlines continue to engulf the media.
I’m hearing the “nows the time to short” theme.

However I truly believe that the Nov - Dec pension inflows is something that really could hurt the overzealous shorts in this market.

The inflation theme is very strong and is real. But in this low rate environment
It’s going to be very difficult for Q1 flows to go elsewhere. It may sound crazy but equities and CTAs will win the majority of the new year allocations in order to hedge the inflation concerns.
It’s even more of a Bull case that the market has slowly been normalizing to the effects and has not had a “shock scare”.

Every RIA, and “casual investor” is aware of the theme by now.

I understand that inflation has hurt markets before. It is important to understand
that the avenues for fund flows have changed tremendously in this new market. Larger positioning will focus on TIPS/ CTAs / and of course U.S equities.

One could argue that the health of the market is compromised and it’s a walking zombie (thanks captain obvious).
That argument is as invalid as the guy that’s shorting a tech company due to a bad P/E ratio.

Market/ economic health is different than fund flow/ positioning.
Some sectors will be impacted in a bad way and we may see small market pullbacks (like we have been seeing)…. But new flows are limited in where they can go and the absolute last thing they will do is move to cash.

**Obviously not investment advice**

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Kris Sidial

Kris Sidial Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @Ksidiii

13 Oct
This is really such a big factor that nobody else talks about. When I explain to investors there are only 4 real liquidity providers in the space, they think I’m a madman.

This is one of the biggest changes in this market.
Only a handful of liquidity providers, and they will all act in the capacity to pull liquidity (lightening fast, with good technology) during a risk off event.

Technology and markets have grown but these factors in turn have ended up hurting REAL liquidity.
It’s hard to get restaurant to function properly when the chef is in the back eating the food.
Read 4 tweets
8 Oct
During moments of market stress, it’s normal to have clients reach out and ask “what are your thoughts”. One client reached out last week during the selloff and was surprised to hear me have a bullish stance while the market was getting sold off.
It’s important to have your own take based on your own data. Headlines can alter sentiment very fast and smart money doesn’t operate on the headlines that are fed to the fishes. That’s not how trading works.
The client responded jokingly, “you guys are supposed to be our vol guys”

That’s the other problem with asset management…. everyone is trying to push their own book & agenda.

If you are an allocator and you have a vol manager that always claims the sky is falling,
Read 6 tweets
3 Oct
As a follow up to this thread, this is the reading list FNY gave me back in 2014.

I finished the list in 3 months.

Disclaimer: There is no vol stuff in here. This will not give you any secret sauce for volatility strategies / alpha.
What this list will do is mold your mentality to become an overall better trader

It will help you zone in on the psychological aspect of the game

Highlighting the emphasis of supply & demand imbalances, while creating asymmetrical payout structures and becoming a risk freak
These skill sets can be applied to any market & asset class. The dynamics of a market remain the same regardless of the product type you are trading. Doesn’t matter if it is 1M Var swaps or front row tickets to a yankee game.
Read 6 tweets
3 Oct
As we grow, you guys continue to take an interest in myself and the team at Ambrus. I just wanted to say that I’m very grateful that you guys have such kind things to say. Im glad to be some kind of value add with the commentary in the vol space and trading world.
I get a lot of people mentioning me/ commenting/ DM’ing etc. I often don’t get the opportunity to read all of it. If I did, I would probably be out of a job due to lack of productivity lol
I pride myself in being a dude who is authentic as can be. I was raised a certain way… if somebody speaks to you, you answer them.

Basic mannerism and respect to everyone in a uniform way. There’s people on here who are mothers/ fathers/ grandparents etc.
Read 7 tweets
30 Sep
It’s weird, but I really can’t explain the love I have for this game. The money that comes from trading is certainly rewarding but there is an internal driver that means something. You could pay me more money to do something else and I just wouldn’t be able to do it.
The first time I realized that I was actually a consistently profitable trader, it was a feeling I couldn’t explain. I looked at the P&L reports and realized it was 9 months straight of profits with solid drawdown control and large sample size (lots of trades).
It was like “damn I could really do this”. From that time I traded well, made mistakes and grew from them. All which helped mold me. So much time and love invested in this craft, I couldn’t even imagine leaving that feeling.
Read 8 tweets
28 Sep
You guys seemed to enjoy this thread on kurtosis trading so I wanted to add some commentary on what matters

A year ago we did a study on where the short dated vol smile was 1M before a large blowup in single name equities
Interestingly enough, the largest vol events did not come from a cheap smile or a rich smile. The smile always was in an area that signified "not too rich" "not too cheap" on a historical lookback. Why is that ?
Here's the reality, the largest blowups come from two-way price action, not directly from one way flow. What the heck does this mean?

Lets take cov-19 for example. Positioning on the street was one sided as there were a ton of hidden basis risk with vol sellers.
Read 15 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!