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Robot James 🤖🏖 Profile picture
@therobotjames
Oct 14, 2021 • 4 tweets • 1 min read • Read on X
This Burry chap seems nice...
And, is it just me, or is getting absolutely balls long a concentrated hugely negative-carry bet written and marked my a more powerful counterparty, essentially a masterclass in how NOT to trade?
If I were Burry then, instead of having a cringe boomer Twitter meltdown, I would simply put on some My Chemical Romance, do some blow with some goth hookers, and blow off steam the old-fashioned way.
That's probably enough internet for today... 😂

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More from @therobotjames

Robot James 🤖🏖 Profile picture
May 21
nearly everything that is a good repeatable trading idea looks like:

"under <some circumstances> this thing is likely to be too cheap/rich because <some people> are being forced or greedy or stupid... so the thing is more likely to go up/down in the future" Image
your job as trader, operating in an efficient, competitive market, is to tell yourself that your idea about that is probably bullshit.

and quickly prove to yourself that it is indeed bullshit.

destroy those hopes and dreams quickly... and move onto something more productive. Image
you can show that something is a BAD idea way quicker than you can show yourself that it's a good idea.

and showing yourself quickly that something is a bad idea is a GOOD thing...
Read 16 tweets
Robot James 🤖🏖 Profile picture
Sep 30, 2024
all active etfs are trash.

under the premise that all active etfs are trash, i looked at what it would look like if you could shorta bunch of them against an equivalent SPY long.

the legs are sized to equal volatility based on 120 day rolling realized vol. Image
highlighly scientifically, i looked at etfdb and picked 15 active / tactical ETFs based on their name and category. Image
here's the performance of the long SPY / short ETF pairs individually.

some did less bad than others, but all the ETFs underperformed SPY, risk-adjusted.

FIG, HFND, MOOD look especially bad. Image
Read 6 tweets
Robot James 🤖🏖 Profile picture
Apr 23, 2024
trading is hard.

if you disagree, that's cos you haven't done it for long enough.

you can get lucky for a while - but your luck will inevitably turn

you can find yourself doing the right thing at the right time for a while - but markets adapt quicker than you can, typically.
extracting returns from the market, persistently, over years and decades is tough.

it requires pragmatism and flexibility.

it requires you to be decisive about trade-offs, in a world of incomplete information and massive uncertainty.
if the responsibility of turning money into more money incites a certain amount of anxiety in you, that is the good and natural and correct response.

financial markets are highly competitive.

that's because they are competitive, they are highly adaptive.
Read 18 tweets
Robot James 🤖🏖 Profile picture
Apr 16, 2024
i saw a bunch of people saying that high-ish interest rates were very bad for risk assets.

you shouldn't believe it when ppl say stuff like that

ppl say all kinds of dumb stuff

and you can investigate it yourself in five minutes to see if it's bollox or not.
this page lists historical total returns on stocks, bonds, and bills, and historical yields since 1928.



we can pull that into excel with Get Data > From Web, then pasting that url.

here is the data pages.stern.nyu.edu/~adamodar/New_…
Image
now we want two columns of data.

1. the annual returns on 3 month t-bills
2. the annual returns of s&p500 including dividends

so, to keep it tidy, lets remove all the columns we don't need. Image
Read 8 tweets
Robot James 🤖🏖 Profile picture
Mar 19, 2024
if you try random trading rules on raw data, you'll find a lot of stuff that would seem to have made money in the past if you'd been trading it.

but you're unlikely to have achieved anything useful, even if your simulation of all the frictions involved was perfect.
the main reason for this is luck.

your raw data contains a lot of non-randomness.

sims on options contacts, especially, are full of unintended bets.

contracts are incomparable with themselves as price moves relative to their strike, and as time approaches contract expiry.
if you simulate buying a 1m ATM straddle at the start of the month, it starts off being a delta-neutral bet on 1m volatility.

but during the month it picks up directional risk that you didn't want and becomes a smaller bet on more volatile shorter-term volatility.
Read 18 tweets
Robot James 🤖🏖 Profile picture
Feb 19, 2024
at some point, volatility is going to spike a lot.

and lots of you are going to get rekt cos you didn't have a good plan for what to do, or you didn't stick to it.

i can't have that on my conscience - i got enough already - so pls read this and make a plan.
you need to be prepared to TRADE to keep your risk in line.

the market is constantly giving you risk you don't want.

there's no excuse for just accepting that.

if the market gave you risk you don't want, you gotta trade to push your risk back to what you wanted.
1. when you first put a position on, the risk you want and the risk you have are the same.

2. over time, the market gives you different risk

3. when the risk the market gives you is more (or less) than you'd accept, trade to push it back within acceptable bounds. Image
Read 9 tweets

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