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InvestiBrew

@InvestiBrew

Nov 12

Did you overlook the manufacturing PMI too?

It's okay, because we're going to break down a bit of what happened in it, and which industries we were led to look into

Think of $XLI $XLY and even $XLP in industries like food & beverage

I believe these will outperform the $SPY $ES as manufacturing is an underwater volleyball right now

A 🧵☕️

1. Looking into the overall index, it has been contracting for 24 consecutive months

Which means any and all growth in US GDP is coming from two places right now:

1. Services PMI
2. Inflation

But

We think that a $DXY decline on new Trump policies could revive manufacturing in the coming months 👀

2. The drivers right now are some of the most important segments as always:

New Orders, Production, Employment

While these are still in contraction territory, New Orders and Employment have shown potential signs of bottoming

That will eventually lead to production, not to mention high margins due to the low inventory situation right now

Read 7 tweets

InvestiBrew

@InvestiBrew

Nov 11

$84,000

That's $BTC all-time high most of you woke up to today

But

Other asset classes like $TLT $GLD $OIL are sending a warning for $SPY $ES right now, and I think you should be aware, especially crypto bros

A 🧵☕️

1. Ever since Trump won the election, there was an everything rally

But just like Warren Buffett likes to say, a rising tide lifts all boats

Then he also likes to say that when the tide goes out you know who's been swimming naked

So, is $BTC swimming naked or is everyone else?

2. Here's what we mean by that

Look at the charts, you have $BTC (a risk on asset) outperforming while every other risk on asset underperforms

Think $OIL $GLD and how $TLT yields are lowering today

Then you also have a $DXY rally

It's just dislocated today, and I think that's a warning 👀

Read 7 tweets

InvestiBrew

@InvestiBrew

Nov 9

He blew up his capital just like we all do once or twice in our careers

But

He learned that mistakes are valuable in this business, and harnessed all of his into one kick-ass career

I'm talking about Ray Dalio, who runs (ran) the biggest hedge fund in the world

Lessons from his section of "Hedge fund market wizards" by Jack Schwager

A 🧵☕️

1. Just like 90% of the traders and investors interviewed throughout the book, Dalio has his own take on university

"It teaches you that mistakes are bad instead of teaching you the importance of learning from mistakes"

Rightly says that the type of thinking necessary to succeed in markets is completely opposite

2. On diversification

He said that the "Holy Grail" of investing is found in diversifying across assets that have low to negative correlations

By diversifying into only 15 non-correlated assets, you can cut the volatility of your portfolio by up to 80%

Wild but true ✅

Read 8 tweets

InvestiBrew

@InvestiBrew

Nov 5

The last time this happened, the 2008 financial crisis followed

Talking about a credit crunch, showing where the weakness in the system is

$SOFR above $OIS index as the $SPY $ES struggles to make new highs

$IWM struggling vs $TLT and $IVW

Which bank is in trouble?

A 🧵☕️

1. What is the $SOFR? It's how much banks charge each other to lend overnight, used to be $LIBOR

Now, when these rates go up, it could mean the banks know that their balance sheets aren't worth lending to

Some toxicity could have made its way into the system now 👀

2. But, $SOFR by itself doesn't tell you much if all fixed-income like $IEF $TLT is going up in yield

So, you need to compare it to other overnight funding indexes

This is where $OIS index comes in

The spread between $SOFR $OIS had been negative (as it should)

Not anymore 📈

Read 9 tweets

InvestiBrew

@InvestiBrew

Nov 4

You know how Jamie and Charlie from the big short turned $110,000 into $30 million in 4 years?

Asymmetry, they looked for what you might call lottery tickets in the $SPY $ES for big payouts if they were right

$COF was one big example for them, I think $EL will be yours

A 🧵☕️

1. Starting from the top

$ES stock has been on a terrible path over the past 12 months, along with $LRLCY and $LVMH

The reason? Apparently China weakness, but I don't buy it, I think it's got more to do with normal seasonality and new marketing spaces like TikTok etc. 📉

2. I agree that the top line doesn't look that great right now

Double-digit rates of decline in revenue, and sure some of that has to do with China's down cycle (which is over)

But

Gross margins are going up, and that should tell you something about all the $ES brands together

Read 11 tweets

InvestiBrew

@InvestiBrew

Nov 2

Been ripping through Hedge Fund Market Wizards (the book) lately

Decided to discuss what I learned from each trader/investor discussed in the book

Here's a macro trader, Colm O'Shea, who reminded me of some themes I forgot to keep front and center

Annual returns 11.3%

A 🧵☕️

1. After combining his interests in politics and economics, O'Shea developed a fundamental approach to the markets, focusing on trends

He cites Jesse Livermore in how he essentially became a fundamental trader, boiling markets down to "It's a bull market"

Technical second ✅

2. He highlights that policy makers and central banks are not in control

Speculators and markets are, such as when Soros broke the bank of England

Likewise, the Fed has lost control of the $TLT $IEF bond market

But, you have to wait until people start to care before you trade

Read 9 tweets

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