Vuk Vukovic Profile picture
Dec 28 9 tweets 3 min read
Oh yes, 2023 is going to be very exciting indeed :)
#ORCA #OraclumCapital

A quick story on why we decided to go and open a hedge fund? 👇
1/
This was a long personal goal of mine. However, I wanted a fund using a quarterly macro strategy, the same way I trade for my personal account.

Turning BASON into a tradeable strategy was actually inspired by many of our readers and followers.
2/
Dozens of you, impressed by our performance, contacted us suggesting we should turn the BASON into some sort of fund.

We took that advice seriously.

During the summer we made a brief pitch and got in touch with many people from the finance industry and investor community...
3/
...to see if that idea would even make any sense.
A weekly prediction method that consistently beats the markets? Fat chance!

However, much to our excitement, the feedback was excellent.
4/
We got really useful suggestions on how to organize the whole thing, how to backtest a bunch of alternative strategies, how to set up the fund structure, automate our trading, etc.

A few of these calls ended up as our first investors. Kudos to them for taking the plunge!
5/
The next step were a few cap raise events, to see if there is any real interest among investors.

Again, to our excitement, there was.

The stage was set, regulatory requirements fulfilled, the fund is registered, and will be live trading by the end of January 2023. Liftoff!
6/
A big thank you to everyone who participated in our survey competition. We couldn't have done it without you!

In 2023, we are giving you even more - linking your performance to the performance of the fund.
7/
And finally, a big thank you to everyone who already pledged to invest and support this idea from the start.

I will never forget that, and will strive to return the favor in the best way possible.

Have a very happy 2023! #HappyNewYear
All the details are available on our newsletter, have a look:
oraclum.substack.com/p/we-are-launc…

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More from @wolf_vukovic

Nov 9
#Election2022
No red wave in House. Senate will most likely stay Dem.

None of the “polling aggregators” got this right. Again. Similar story to 2020 really.

If we made so many errors predicting markets each week, we wouldn’t be in business any more. Just sayin :)
For the record, our performance in 2020:
Read 4 tweets
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
Nov 4
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
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! Image
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
Oct 10
Well, this is interesting - a #Nobel to the man who brought us QE :)
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
Oct 4
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

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