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Michael Profile picture
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26 Nov, 4 tweets, 3 min read
It’s Friday afternoon, first meal of turkey leftovers (turkey cream of cauliflower soup) in the belly… and pondering Dow Theory. Most technicians are aware of the idea to watch divergences between INDU and TRAN as we saw in the lead up to March 2020… or March 2000
2/n So there’s a bit of relief when the TRAN breaks to a new high in early November… but…
3/n there’s a bit of a collision of worlds at play… it turns out that the reason the TRAN hit new highs is due to a single meme stock: $CAR (Avis). In fact, ex Avis the TRAN has turned down from a lower high and broadly the index constituents are lagging badly
4/4 While I don’t have the data in front of me, I’d hypothesize a similar dynamic for the now failed R2000 breakout as $AMC is the largest stock in the index now. So the unresolved question becomes “Did the TRAN make a new high or not?” And if not, Dow Theory suggests caution.

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Michael Profile picture
20 Nov
1/n This is a good thread that introduces some aspects of fundamental analysis into crypto. There’s an important financial concept that @ercwl misses that’s worth understanding. Eric highlights that “There’s a monetary premium here that’s being broadbrushed all over everything”
That certainly may be true, but there’s actually a valuable concept driving both relative AND absolute value in the space. Crypto tokens, certainly as currently presented, represent optionality on “winning” in a generally acknowledged GIANT space. We do NOT know the winner.
3/n But what we DO know is that options cannot have negative (or really even zero until expiry) value. If you are long a call option with potentially a very long life, then high volatility and UNCERTAINTY are actually your friend.
Read 9 tweets
Michael Profile picture
15 Nov
1/n I’ve read this nonsense enough now that it merits illumination. Bridgewater’s theory of inflation is making the rounds. I agree it’s mostly a demand shock, but for a global macro firm it’s remarkably provincial bridgewater.com/its-mostly-a-d…
2/n the “knockout” theory everyone keeps repeating is “supply is HIGHER” so it must be outrageous demand. This is NOT what the paper shows. Note carefully “goods for US demand”
3/n The demand shock has been for goods, especially durable goods, consumed by US households given a transition to homes as 24/7 resorts. Fire pits, hot tubs, etc. And yes, China ran flat out producing these goods alongside bat 🦠. We appreciate the hard work and lack of ‘tude 🙄
Read 6 tweets
Michael Profile picture
5 Nov
1/n Have seen a few discuss the recovery in prime age labor force participation even as overall participation fell. This conceals an important structural change that has occurred in childcare, both supply AND demand
2/n If we look at female labor force participation rates, there has been a much more dramatic decrease in participation between women 25-34 (no school age children) and women 34-45 (on average school age). 25-34 down less than 1% while 35-44 down nearly three full pts
3/n Childcare services, including schools, have seen a structural increase in costs. I don’t have specific industry knowledge here, but I’d imagine insurance costs up sharply. And we are all aware of unskilled labor issues. But add in extra issues of runny noses, etc 🎉
Read 4 tweets
Michael Profile picture
8 Oct
1/n In honor of my friend @gladstein’s excellent article on El Salvador and Bitcoin Beach (bitcoinmagazine.com/.amp/culture/t…), I have made keto pupusas! I found the article unconvincing as to the merits of Bitcoin, but it sure made me hungry!
2/n The article highlights the ease of transactions for American multinationals (McDonald’s, Wendy’s etc) and the impact of generous bitcoin donations from around the world. But it (un)ironically highlights that “hard” money prevents redistribution in social programs and that
3/n dollarization largely benefited the wealthy at the expense of the working class — a point I have made repeatedly regarding bitcoin. There is no native bitcoin mining to speak of, although the increasingly dictatorial Bukele plans to utilize non-surplus energy to mine for the
Read 5 tweets
Michael Profile picture
30 Sep
1/n Fintwit, let's show some love for the scholars at @CiPrep. Our speakers, @davidein @muddywaters @wolfejosh are joining me and @SimplifyETFs in matching the first $5,000 for a 5:1 homerun. Please donate and register! bit.ly/3zYVRkV
Donate: bit.ly/3zX8H2U
@CiPrep @davidein @muddywaters @wolfejosh @SimplifyETFs 2/n @CiPrep is a charter middle and high school in the Coney Island area of Brooklyn. The vast majority of students are economically disadvantaged (86% qualify for subsidized lunch programs).
@CiPrep @davidein @muddywaters @wolfejosh @SimplifyETFs 3/n Embracing these challenges, CIPrep has managed to excel with absolute performance near the top of all schools and community adjusted performance off the charts.

CI Prep scholars had a 100% college acceptance rate for the third consecutive year in 2020.
Read 5 tweets
Michael Profile picture
27 Aug
@coloradotravis @0xMakesy @jchervinsky @SantiagoAuFund @ross_phelan 1/n I thought it was a very good rant. Many of the optimistic takes you highlight are consistent with my views. But I’ll ask again, why do we need Bitcoin (or Ethereum) for this? Blockchain doesn’t require bitcoin and digital scarcity doesn’t require Blockchain.
@coloradotravis @0xMakesy @jchervinsky @SantiagoAuFund @ross_phelan 2/n Peer to peer with redistribution of profits has occurred in many markets without (necessarily) the end result being superior. A simple example is the advent of digitalization and decentralization of market makers (from Specialists) on exchanges. Different? Sure. Better? Maybe
@coloradotravis @0xMakesy @jchervinsky @SantiagoAuFund @ross_phelan 3/n Ken Griffin is much richer and more powerful than Peter Kellogg (Spear Leeds & Kellogg) ever was. Unlike Kellogg’s ancestor (also Peter fwiw), he was not there with excess capital in 1932 to help rebuild in 2008. Instead he’s required a few bailouts. In the meantime, check
Read 7 tweets

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