Some final, relatively objective thoughts:
(1) I would be shivering if I was Poland right now. European defense is going to need to bulk up, hard.
Same with Taiwan.
(2) I think both the small caps and long bond moves reverse. Not going to step in front of either, but seem silly. (3) I don't believe there will be significant tariffs passed, nor substantial cuts to the government budget. There will probably be more tax cuts, but it seems unlikely to see much at the corporate level - probably more handouts to wealthy individuals directly. But, who knows.

There's a lot of talk on here about the Polymarket odds and the mysterious trader Fredi9999/Michie who moved them, and I think it's an interesting topic, and also related to the broader overvaluation we see in the US (and Indian) markets. If you're not familiar with it, Polymarket now shows 60/40 odds for Trump for president, largely due to the flow created by the four largest accounts, who many have surmised (and probably are correct) are the same or associated individuals.

It's not worth listing all the signs of froth, because they're everywhere.
You can't short a market and reasonably expect to profit when a completely worthless social media company with declining everything is up 15% today. A fun froth sign to note is the spread between S&P Small Cap 600 and Russell 2000 - essentially identical in composition with a slight positive alpha to long the former (IJR). Russell outperforming 3+% YTD because speculative froth demand (futures, mainly).
This is dumb.

My hot take is that America is much much better at assimilating immigrants than any European country, it’s literally a skill issue
I have friends of extremely varied ethnic/religious backgrounds and we all broadly share similar values 🇺🇸

https://twitter.com/kroketrendang/status/1795768912384328143

I think a large part of why is the American identity has always been a choice to come here and built on shared values despite a fringe of white nationalism, versus European nations were built on an ethnicity that is now uncomfortably pluralizing

well, you know, the reason all the young people fled Eastern Europe is because half the countries are shithole authoritarian dictatorships
source: am Romanian by ancestry

https://twitter.com/mndl_nyc/status/1790763520134406569

It turns out it's hard to keep your smart people from leaving unless you build an economy and grant them civil rights or build a big wall and arrest people via secret police
You can't half ass it, either go full East Germany or full Tusk Poland

my favorite part of logging into twitter is seeing how the rich and powerful can spaghettify their brains in real time in online echo chambers, like a grand experiment of what happens if you remove any effort from satisfying maslow's hierarchy of needs it turns out that if you've already won the game of life, there is no higher calling than retweeting propaganda, hate, and arguing with faceless strangers online

it is the apotheosis for the gestalt soul of mankind

So I've been working on a new version of my forever portfolio to add a bit of diversifiers. It's not entirely passive which I don't like as much, especially because there's a lot of subjectivity in performance of equity market neutral and managed futures funds (they're very different in overall performance over time).

The largest existing weaknesses of the Forever Portfolio, as I observed over the last year is the susceptibility to the stock/bond correlation. This isn't surprising at all, and it generally shares very high correlation to the 60/40 portfolio, since it's broadly similar, except replacing half of the bond allocation with gold.

Inspired a bit by @choffstein's Return Stacking series, I worked on an interesting variation of the All Weather portfolio. This includes managed futures and equity market neutral allocations, which, at least to me, makes it not a passive equivalent. However, it's pretty well known from AQR and others about managed futures' diversification benefits, although, it has a small tendency to have mean-reverting performance (aka one good year tends to be followed by a bad year, etc).

This allocation is an attempt to be as model-free as possible (hence the rounded numbers), but as I mentioned, it's fairly high susceptibility to manager bias - not all CTAs are built the same, and neither are all equity long/short funds. The easiest ways in ETF space to get exposure to managed futures as far as I know are $KMLM and $DBMF. I'm very much a fan of "I don't know what I don't know" so my tacit view would be to diversify equal weight across many or all managed futures/equity market neutral fund offerings, to try and reduce manager bias as much as possible.

Interestingly, this portfolio, which I nickname All-Weather, has on a risk-adjusted basis outperformed the Forever Portfolio since inception (~2012), but more interestingly to me, it serves as a diversifier to the Forever Portfolio, which I quite like.

Both take periods of outperformance, and the combined results are quite good, in my view.

The critical difference in the recent mRNA study results versus more "conventional" (still very new) cancer immunotherapy techniques like CAR-T is:
(1) The researchers claim to have bypassed the hostile tumor micro-environment which usually involves peripheral immune tolerance -- which renders most immunotherapy techniques relatively ineffective at targeting tumor cells
(2) They do this using an innovative (proprietary) design which mimics highly infectious viral structuring - essentially multiple vesicles with personalized mRNA targeting the unique tumor genome - versus a single one
Preprint/medxriv here:

(3) Shown to be working in trial of 4 human candidates -> all patients lived longer than expected w/ aggressive glioblastoma (still alive from what I can read, but obviously they can't say how long yet)
Mirrors results from trial on 10 dogs also with terminal brain cancer
medrxiv.org/content/10.110…
ufhealth.org/news/2024/uf-d… It seems current results on a fairly aggressive tumor (glioblastoma) indicate a massive immune response very quickly, but doesn't really have much on if there was observed pseudoprogression like other cancer immunotherapies.
That said, I haven't read the Cell article (it's behind a paywall but I might give in).
(1) The timeline for action and expected time to survival in at least the dog cases probably indicates they did not observe pseudo-progression, which tends to be tumor expansion for the first 6-12 months when immunotherapy begins.
Given expected time to death was around 60 days and observed survival was about 140 days, probably not.

What's the next big theme everyone is missing? I can keep sharing mine but I'd like some actual replies here, not just jokes.
Mine:
- Bird flu scare
- Long e-casinos, short casinos
- Long airports, short airlines
- Long gold, short long bonds (on hiatus IMO)
- Long home construction, short regionals
- Long NATO + allies defense, short US defense
- Long med devices, short fast food (finally starting to play out)
- Long georgian banks, short Russia exposed nonsense

Pay attention to which of my shitposts go viral, there tends to be very strong market alpha.
Good examples:
- (2/5/24) When I noted in February that there was a Chinese stock which was, by all metrics, one of the cheapest 10 equities on Earth: massive engagement, mostly negative -> stock rallied 50% right after
- (3/27/24) When I joked end of March how why should anyone do anything productive other than trade meme coins: massive engagement -> Solana nearly tops to the day since
- (10/12/23) When I clown Paul Krugman for his bad inflation take stripping out things people need to live -> almost the exact local top on long term yields
- (4/26/24) When I make an observation on the yen and how it depreciated rapidly -> ??? Another fairly recent one:

https://twitter.com/nope_its_lily/status/1782873254933483688

To clarify to new/existing followers why I talk with the breadth I do, my trading strategy is essentially to add orthogonal (or relatively orthogonal) different L/S equity thematics, size up the ones that are doing well, size down the ones that aren't.
So the more markets I look at, the less correlation I'd generally expect (outside of maybe crises, but hopefully relatively muted performance there), the better my overall book performs. That said:
1) My views are incredibly loosely held
2) I do not expect any given idea/thematic works, just that the average one I put on has positive expectancy
3) I am a tourist in basically every single market, so please don't ask me for analyst level advice

Basically the whole market looks overvalued as shit, and half of you are going to short it and lose everything, and half of you are going to long it and lose like 20%. If dogshit industrials and deep value and utilities start pumping, or god forbid EM trash is pumping, it means we're probably closer to a top than most want to admit, but who the fuck knows.
Too many dollars chasing too few things.

I think few people here talk about their losing trades and the crummier side of prop trading.
I'm not here to sell you anything. Frankly, I would like to convince more of you not to pursue trading, because it's one of the worst work-life balances you can imagine. Let's talk about some losing trades I've done recently.
I am not going to name tickers because it's irrelevant anyway. 1) The biggest loser thus far, recently, was a pseudo-arbitrage between a well known commodity and an infamous holder of the same commodity. I don't really need to share which names; you can guess.

The thing about mean reversion trades like this is they can be very, extremely painful. Trend is nice and gentle. Mean reversion you need to be prepared to be ripped open and then bet more with your own blood.
Risk management tends to be far more important on these trades.

I'm not saying crypto looks like a local top here, but I am saying that in a month if it's 20% lower it will have been entirely obvious to sell here.
---
That said, I just follow momentum, so yeah.

https://twitter.com/nope_its_lily/status/1732809708648734874

My own signals and positioning is quite long, but am I uncomfortable here? Absolutely yes.

Good post-mortem from in my view a talented fundamentals trader
Sizing is generally what kills you, and I've never been able to find a sizing on bets as robust and good as simply 1/n

https://twitter.com/kingfishcap/status/1764195121875362234

I saw a few of his write ups and I can't disagree with his line of thinking, but two things:
(1) It's hard to critically own value or even special sits stocks in size especially without positive momentum simply because you're giving a giant F-U to the market. The price of any asset is the collective intelligence of everyone else, so buying something in a downward trend is simply saying your thesis, your view, is not only better than everyone else's, but that you know eventually it will be realized
(2) Selling options is a mine-field, and whatever your worst case is, you should at least double it. Selling puts of course is less risky than selling calls.

One interesting thing I talked today about was viewing risk, especially in the context of trading relatively sketchy (be it shitcoins with rug risk, foreign equities on 3rd-tier exchanges, etc.) assets.
Risk is three-dimensional. It is:
- Exposure time
- Concentration
- Loss potential (probability of risk event * recovery value)
In general, it can be +EV to take relatively high credit risk for short time horizons, especially if the expected return makes it worth it and your concentration is fairly low In general, I prefer always to take more risk with a smaller amount (whether it's junk bonds, Chinese equities, or F-tier shitcoins) than take less risk with a larger amount (aka like BB bonds or ADRs) because risk is highly correlated in black swan type events, and assuming you're long the asset, your loss potential is a lot lower in the extreme left tail

This is an interesting question and kind of goes into the divide between a discretionary approach and a quant one.
In reality, factors aren't real things, and over long periods of time, a company or even more, an index, can shift its actual factor exposures.
If I make a call like "long e-casinos, short casinos", I'm not taking an outlook on any given factor, I'm taking an outlook on a business trend.

If I were to quant it, I'd compare it to two benchmark portfolios - a risk parity one (equal expected vol contribution from all strategies) and an equal weight one (could be equal net or equal gross, though, since sometimes you're running long/short ideas). I work with a very talented quant here and we've discussed this exact problem - in a multi-factor risk model, tweaking it based on a PM's outlook.
There's no right answer here. For me, currently, I just equal weight roughly all strategies, constrained to a $ gross cap and $ gross min (essentially 0). So the trend following layer occurs in between the min gross cap and max gross cap per strategy.

More updated portfolio breakdown:
- Long high coupon preferred and qualified dividend stocks, skew towards consumer staples and energy (oil)
- Long new GLP1s, short old GLP1s
- Long medical devices, short fast food
- Long China rebound (calls + tech stocks)
- Long Taiwan semis + American tech, short Indian offshorers
- Long hotel chains, short hotel owners
- Long airports, short airlines
- Long Pakistan (not positioned yet, but closer to election date will be)
- Long Phillippines (stock transaction tax)
- Long bitcoin (crypto, tactical)
- Long Japanese net-nets with good momentum (1/3rd infotech, 1/3rd industrials, 1/6th fin, 1/6th consumer disc)
- Short vol discretionarily (mostly single stock, haven't ramped much here)
-----
Probably a lot of factor mismatches here, but most of these trades are relatively idiosyncratic, and I'm not particularly concerned about being paid for factor risk here.
More worried about being overdiversified.
Overall portfolio is skewed short dollar, long beta (but not much). I'm going to spend a lot of time tracking the performance sleeve by sleeve of these different verticals. There's some sector skews here on the sleeve level of course (+med devices/-fast food hs residual XLK/XLP beta), but that's again not something I want to remove.

I find it helpful, mostly because I'm a miser and pessimist at heart, to think about events in terms of short term, medium term, and long term flows impact.
For the Bitcoin ETF launch (basically a guarantee):

** Short term **:
I expect bullish flow, if any, from speculators primarily, similar to the launch of BITO in 2021. However, this is short lived and exponentially decaying.
I do think this will mark a topping period similar to the late April and October 2021 periods, where Bitcoin related beta bets tend to outperform in the short term, as well as altcoins.
I do not have any compelling reason to expect significant, durable flow from otherwise non-crypto participants in the short term; there is no catalyst that would imply it.

I do expect varying amounts of bearish flow from speculators unwinding their bets. We can see, despite the narrative that "the consensus is sell after ETF", this isn't actually reflected in any meaningful market positioning. Funding, volatility skew, and CME basis all expect high upside and high volatility.

There is, potentially, a catalyst with GBTC conversion, which may lead to redemption (unclear). ** Medium term **
This hinges primarily on if the spot ETF is meaningful, and moreover, if the spot ETF is followed by spot ETF filings for other cryptocurrencies.

I do think the medium term flow post-ETF will be from more institutional legitimacy of crypto, and more investor interest. I do not think that increased investor access will be meaningful here (as I asked about before).
That said, I think the Blackrock and Fidelity names will be large here for increasing both investor awareness of cryptocurrency, as well as driving more financial advisors and retail end users to consider it to be part of portfolio allocation (however, this will take a *while*).

I think the more meaningful case to consider here is the impact of further spot crypto ETF approvals conditional on substantial trading volume for the bitcoin spot ETFs. I do expect that one or two spot ETFs will absorb most of the volume, and it may not be the cheapest (see GLD vs IAUM).

I think that this is generally bearish for traditional crypto exchanges, since the custody business is much worse than the exchange business. Others may disagree, and the bullish outlook is that this may serve as a loss leader to drive altcoin interest.

That said, my general expectation is the medium term flow impact would be neutral to bullish, with more likelihood of slightly bullish.

You've finally become a real adult when you realize that no one's controlling the strings.
There's no shadowy cabal.
There's no faceless Illuminati that somehow orchestrates the world.
It's just people. Mostly incompetent people. Uncoordinated groups of us, meandering and trying to maximize our own happiness and comfort.
There's no one in control, at all. And that's scarier. It's much nicer to imagine, even if you conspiracize they're the ultimate evil, that somehow, Davos or WEF or UN or the Jews or Big Finance ETFs are in charge.
Then you can believe the world makes sense, that there's ways to restructure society that can actually make it simpler and better.
Because without that, your efforts seem small.
If there's no one behind the curtain, what are you fighting for exactly? What can populists rally against?

Some thoughts from a relative neophyte in crypto.
I am sort of adjacent to the space, but not in it exactly...
I remember I first heard about crypto in 2017 and opened a Coinbase, bought some ETH and BTC then, sold right around the top for a small loss (bought around the top too).
I do remember the 2020-2021 cycle very well though. I made a bit from it, but not much, personally (it's just not a big chunk of my assets).
Crypto is a very rhythmic asset class, and one of the best to trade. @cobie explained it well a while ago, but it's dominated by narratives and momentum of narratives.
Right now arguably the narrative is the ETF, but let's hope it continues to sustain, because this exact same rally has failed twice before (2018 - top of the market/introduction of CME futures, Oct 2021 double top - launch of Bitcoin Futures ETF) 1) There's actual signs of institutional interest - both from the grapevine and also quite notably in the leadership of CME as the venue of exchange for Bitcoin trading. That's a fairly new thing, and good for the space.
There seems to be renewed interest in Bitcoin as a store of value or portfolio diversification trade, and so far notably this year it has proven some merit (Mar 2023 - the easiest do-or-die moment for Bitcoin).
It's unlikely the actual launch of the Bitcoin spot ETF will bring much inflow into the space, but I could be wrong. Gold had similar in 2004, but it really depends on a relatively unscrupulous network of financial advisors to push said ETF onto their clients (gold was an easier sell, because well, everyone knows what gold is).