Vuk Vukovic Profile picture
Vuk (eng. Wolf). Oxford PhD, runs a data sci company @OraclumIS, writes about markets & investing (subscribe: Loves family & cooking.
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Apr 12 25 tweets 8 min read
Bullish or bearish?

Let's see 👇 🧵 1/ Let's start with the bearish arguments.

Rampant #inflation is killing consumer confidence

Which is down to recession-time levels

(source: Uni of Michigan)
Mar 11 21 tweets 6 min read
Yesterday's 7.9% CPI didn't even take into account the escalation in prices due to the war in Ukraine and Russian sanctions.

Inflation will, unfortunately, continue to rise despite earlier trends of supply chain easing 😩
🧵 👇 1/
In my previous threads I first explained why the source of inflation this time wasn’t entirely monetary:

Feb 26 8 tweets 3 min read
Since Russia invaded Ukraine on Thu, S&P500 went from -2.5% to +1.5% in one day, continuing +2% on Fri (cum +6%!)

NASDAQ grew a cumulative +8% since Thu dip!

Why are markets rallying during a terrible war in Europe?

Very quick thread 👇 🧵 1/ Are investors just brutal warmongers looking to benefit from other people's misery?

(Well, some might be, but not most)

Markets are forward looking; investors anticipate medium to long-term consequences of major events.

Investors also *hate* uncertainty.
Feb 11 21 tweets 5 min read
Why were supply chain issues such a huge driver of inflation?

And when might they ease out?

Everything you want to (need to) know about the supply chain crisis.

Thread 🧵 👇 1/ In my previous thread I explained why I think the 7.5% inflation does NOT have a strictly monetary origin.

What is its origin?

Over the past year, prices are up mainly due to a post-COVID driven mismatch in supply and demand.

Feb 8 21 tweets 6 min read
“Inflation is always and everywhere a monetary phenomenon.”

...said Milton Friedman.

Not this time though. This time, Friedman is wrong.

Here’s why 🧵 👇 1/

What Friedman meant was that inflation was always caused by an increase of money supply.

In the vast majority of historical cases this was true:

Germany in 1920s,
Zimbabwe in '08,
Venezuela in '19,
Turkey in '21, etc.

Not in present-day US, though.
Jan 31 16 tweets 4 min read
Is the market in a correction or is this the beginning of a crash?

(And how to protect yourself from both using tail hedging)

Thread 👇 🧵 1/ Ever since 2008 I’ve been hearing investors predicting an imminent crash in the next 12 months.

Or that hyperinflation is inevitable b/c the Fed “printed” all that money since then.

This prediction happens literally every year. Almost every quarter actually.
Jan 21 17 tweets 4 min read
S&P500 is down 6.5% since the start of January.

Nasdaq is down over 10%, the Dow 6%.

Why do stocks go down when Treasury yields (i.e. interest rates) go up?

Especially tech stocks!

Thread 👇 🧵 1/ The standard textbook explanation is this:

The Fed ⬆️ rates, this ⬆️ borrowing costs for banks and pretty much everyone else.

The story then unfolds:

Interest rates ⬆️, mortgage and credit card rates ⬆️, disposable income 🔽
Jan 20 10 tweets 2 min read
A quick lesson in statistics
(& causal inference)

What's a good example of the omitted variable bias?

This 👇
1/ First, what is omitted variable bias?

It's when you think A caused B...

...without thinking about *all* other factors that might have caused B.
Dec 26, 2021 27 tweets 8 min read
One of my favorite #Christmas-themed movies has to be Trading Places, the 1980s comedy staring Eddie Murphy and Dan Aykroyd

The last scene in particular is what got me hooked :) It’s that classic ending that keeps you wondering.

Wanna know how they did it?

Thread 👇🧵 1/ we all know the story from Trading Places. Aykroyd plays a snobbish priviledged broker Louis Winthorpe ("the Third"), while Murphy plays a street con artist Billy Ray Valentine whose lives get reversed as a result of a bet between two cruel millionaires, the Duke brothers.
Dec 23, 2021 17 tweets 7 min read
2021 has been a great year for our #BASON predictions @OraclumIS


Because in 2021, over a period of 22 weeks, we have made stunningly accurate predictions of the #markets, and made a whopping 107% return from these predictions!

A quick thread 🧵on how we did this 👇 1/ First, how does #BASON work?
We ask people where they & their friends think the markets will end up at the end of each week, while applying network analysis to control for their groupthink bias.

Here’s a video explaining it:
Nov 15, 2021 28 tweets 8 min read
What’s a yield curve? Why is it important? Why the inverted relationship btw bond yields and prices? And why do investors keep obsessing about it?

Everything you wanted to know about bond yields and the yield curve but were too afraid to ask – explained 😊 (27-point thread)👇🧵 1/ You’re probably aware that the 10-Y T-bill yield shot up from 0.5% in July ‘20 to 1.1% in Jan ’21, and then to its 1.7% March peak.
It fell back to 1.2% in Jul, shot up to 1.6% in mid-Oct, and is jumping around from one inflation report to the next.

Why does this matter?
Nov 9, 2021 8 tweets 3 min read
Last week the #BASON once again called 8 out of 9 in the right direction, and once again had pinpoint accuracy for the Dow (0.6% error), the S&P (1.2% error), oil (0.5% error), TSLA (1.9% error), while the AAPL price prediction was almost perfect (0.02% error!). In terms of collected profits on the trading strategy, this was the best week yet.

Our weekly profit was $2045, or an average 146% return!

This doubled our weekly winnings, and our total profits for the first 4 weeks stand at $4100.
Nov 8, 2021 13 tweets 4 min read
The Baltic Dry Index (BDI) has gone down 52% since its early October peak (largest peak since '08)

Last time it went down so quickly was just before the '08 crisis, announcing the collapse of international trade.

But in today's context, is this good news or bad news?
👇🧵 1/ The BDI, listed on the London-based Baltic Exchange, measures the costs of transporting various important raw materials by sea (e.g. coal, iron ore, grain).

It takes into account shipping routes, timing of delivery, ship capacity, and is a widely used benchmark in shipping.
Nov 2, 2021 10 tweets 3 min read
An options investment strategy based on our #BASON predictions has delivered a 49.9% return since May, compared to a 10% passive S&P return.

And all that while not even running during August and September!

A quick thread on how it works? 👇🧵 Image 1/ This 50% return is actually severely underestimated, given that we took a portfolio of $10,000 where we only invest $1000 each week (the risk is greater actually, we risk to lose $1000 used to buy the call options, and $600 on the iron condor).
Oct 24, 2021 26 tweets 6 min read
There has been ample talk about an upcoming market #crash ever since, well, the previous crash.

People point to, among other things, Shiller’s CAPE ratio, at a 38 multiple (second highest ever).

How do we know if we really are in a #bubble? A thread is due.
Let’s dive in👇🧵 1/ Is there anything we can use to tell whether a market is indeed in a bubble? To borrow a quote from The Big Short:

Lawrence Fields: “Actually, no one can see a bubble... that's what makes it a bubble.”

Michael Burry: “That's dumb, Lawrence. There are always markers.”
Oct 21, 2021 16 tweets 4 min read
Today $DWAC went up 365% after a merger with #Trump’s new media company, Trump Media & Technology Group (TMTG), the idea of which is to launch an alternative social network to disrupt the FAANGs.

I read TMTG’s pitch deck (did MY OWN research!!!) and here’s what I think👇🧵 1/ The idea is to create a new media powerhouse, with a streaming and news service that aims to disrupt CNN, $NFLX & $DIS+ (Fox news too?), and take on $AMZN in the long run.

The biggest impact ofc was the announcement of launching a new social network to disrupt $FB and $TWTR
Oct 18, 2021 15 tweets 4 min read
Natural gas prices have gone up 220% since March this year. Oil has gone up 140% in the same period (and 440% from its April 2020 trough).

Why is this happening? Time for a quick (14-tweet) thread. 👇🧵 1/ Commodity and energy prices are basically all following a similar trend. Huge post-COVID demand + limited supply and supply chain bottlenecks = high prices

(Econ 101)

Should you be concerned?