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Vuk Vukovic

@wolf_vukovic

Nov 7

Should I buy dollars? Or is it time to get back into euros?

I’ve been long USD since Nov 2020 (bought EUR/USD at 1.21). It paid off handsomely.

So is it time to switch back with EUR/USD at 0.97?

Not yet. 🧵 👇

1/
The relationship between interest rates and currencies is actually very simple and straightforward.

Higher domestic interest rates (w.r.t. foreign rates) =>

=> appreciation of domestic currency (w.r.t. foreign currency)

2/
What are interest rates in the US right now?

4%

What about in the EU?

1.5%

It’s not just the level obviously, it’s the speed of changes + expectations

Read 13 tweets

Vuk Vukovic

@wolf_vukovic

Nov 4

@elonmusk

The economics of the Twitter "blue badge"

A few thoughts... 🧵

(maybe @elonmusk will take notice 😄 )

1/
If the majority of Twitter users cough up 8 bucks a month

so that the majority of users have a blue badge,

it makes it non-special.

Simple supply & demand - ample supply of a good makes it lose its value

2/
I know, I know, this isn't a tradable good, it's not a market, but indulge me.

The imposed scarcity of the blue badge made it special. You could only get it after satisfying a few hurdles related to status.

You still have a hurdle, but it's no longer related to status.

Read 11 tweets

Vuk Vukovic

@wolf_vukovic

Oct 10

This year's econ #Nobel Prize was awarded to three professors for their research on banks and financial crises.

What struck me is this: "The laureates’ insights have improved our ability to avoid both serious crises and expensive bailouts,"

Did it though? 🧵 👇

1/
First of all, let me be clear that I do not express any doubts towards the academic contributions of profs. Bernanke, Diamond, or Dybvig.

I read Bernanke's pre-Fed work on the Great Depression & am familiar with their work.

In a purely academic sense - kudos to the winners!

2/
It's the policy implications that I find problematic.

Three points to be made here:

1 - QE arguably made the system more vulnerable, not less.
2 - systemic risk was amplified, not reduced
3 - the bailouts *were* expensive (and politically driven)

Read 17 tweets

Vuk Vukovic

@wolf_vukovic

Oct 10

https://twitter.com/NobelPrize/status/1579408493211422721

Well, this is interesting - a #Nobel to the man who brought us QE :)

https://twitter.com/NobelPrize/status/1579408493211422721

One of the reasons why Bernanke was chosen to run the Fed back in the day was his contribution to studying the Great Depression and the failures of central banks.

An error he did not repeat during his tenure..

Very interesting timing on this one:
as the BoE is intervening heavily in the UK gilt market,

as US banks are facing $4bn of losses on bad loans,

as Credit Suisse is fighting its own liquidity crisis,
...

Read 4 tweets

Vuk Vukovic

@wolf_vukovic

Oct 4

@OraclumIS

It’s been 15 months of doing #BASON predictions @OraclumIS and live trading them using our options strategy

I've shared the results with you every week, during good times and bad.

Now I wanna show you how a BASON-led full portfolio performed during this year's bear run 🧵

1/
First, about the unusually good results (+155% CAGR, 10.6 Sharpe)

Basically, it's about (1) asymmetric skew - when we're wrong, we lose very little (up to 5%), and when we're right we can make considerably more.

and (2) profits are taken weekly (each Fri) and are compounded.

2/
This return (and the weekly volatility in the graph above) is for the *whole* portfolio, where options were only 10% of it.

If we just look at the options part, its return was >1400%

But I'm not gonna place so much risk on only one strategy, ofc Hence the diversification 👇

Read 14 tweets

Vuk Vukovic

@wolf_vukovic

Sep 23

@MavenHQ

Recommendation: Investing courses on @MavenHQ you might be interested in

👇 🧵

Learning all about macro is just the first important step towards becoming a better investor and increasing your knowledge on the subject

The next steps - understanding how to build a portfolio or trade successfully - are just as crucial for success

To that end, I'm very happy to personally recommend a few great courses,

each of which is also ran as a cohort-based course on Maven 👇

Read 8 tweets

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