Global Macro Trading Journal
- Thread starter Daal
- Start date
Great earnings call from EFC yesterday. Major differences between these guys and a mortgage REIT: EFC is a partnership, and actively seeks to make trading gains. Mortgage REITs (mostly) are buy and hold investors and subject to forces out of their control. EFC can control (for the better, hopefully 
) its own destiny a bit more.
The ability to go after trading gains allows EFC to operate with considerably less leverage than mREITs. The CIO is Mike Vranos who has essentially owned mortgage trading for 2 decades.
) its own destiny a bit more.The ability to go after trading gains allows EFC to operate with considerably less leverage than mREITs. The CIO is Mike Vranos who has essentially owned mortgage trading for 2 decades.
JCP now loses its driver's license as Ackman's partner Steve Roth pukes up half of his stake. Now THIS is what a bottom starts to look like. Not buying, but getting interested. Stock's an immediate double if Johnson gets fired and they bring in a retailing BSD. Stock price may have to go to elementary school before that happens.
An update:
I haven't been very active on macro trading in the last few months. I have been focused on more equity trading (specially on the short side and on short-term time frames) because I'm finding it to be more profitable since I find that distortions there to be abundant and everyday there are new plays.
I have been wrong to have hold a more bearish view in risk assets but I also learned from 2009 so I didn't lose much even though I was bearish. The only plays I got going on are short EWP and EWI (Spain and Italy ETFs) sized in a way to protect my BRKB/AAPL longs JCP calls, I'm also short the EUR but as it went against me I decreased the position. I'm still long Gold (but as I previously posted I decreased the position after gold failed to rally much after QE3)
Overall I'd be scared to be very long risk in the current environment. VIX is super low, contrarian indicators are popping up, everybody is loving stocks, cash in brokerage accounts is getting to levels where the market topped out in the past, all the mutual fund managers keep talking about how the rally will continue because of this and that. Currently I'm just using in a conservative All-Weather portfolio type exposure in order to protect myself. I agree with Druckenmiller, when this game stops everybody will rush for the exits at the same time. What I really need to be doing is buying equity Volatility but I'm not quite sure how to structure these bets in a way that minimizes losses and maximizes gains, if someone got a suggestion I'm all ears
I haven't been very active on macro trading in the last few months. I have been focused on more equity trading (specially on the short side and on short-term time frames) because I'm finding it to be more profitable since I find that distortions there to be abundant and everyday there are new plays.
I have been wrong to have hold a more bearish view in risk assets but I also learned from 2009 so I didn't lose much even though I was bearish. The only plays I got going on are short EWP and EWI (Spain and Italy ETFs) sized in a way to protect my BRKB/AAPL longs JCP calls, I'm also short the EUR but as it went against me I decreased the position. I'm still long Gold (but as I previously posted I decreased the position after gold failed to rally much after QE3)
Overall I'd be scared to be very long risk in the current environment. VIX is super low, contrarian indicators are popping up, everybody is loving stocks, cash in brokerage accounts is getting to levels where the market topped out in the past, all the mutual fund managers keep talking about how the rally will continue because of this and that. Currently I'm just using in a conservative All-Weather portfolio type exposure in order to protect myself. I agree with Druckenmiller, when this game stops everybody will rush for the exits at the same time. What I really need to be doing is buying equity Volatility but I'm not quite sure how to structure these bets in a way that minimizes losses and maximizes gains, if someone got a suggestion I'm all ears
I personally found 12' to be harder for global macro than the last few years, and like Daal have shifted significant focus to individual equities (shout out to ralph for posting good picks). Not to say I didn't make money in 12' with macro, but more opportunity was in stocks I found.
The hard part I re-learned was in essence the trading axiom: trade what you see, not what you think. In detail, I saw my long/short equity portfolio massively diverge from the broader mkt, and correlations break down on the timeframes I was trading. Coming from a global macro background where risk assets usually heavily correlate, and when something doesn't, that's a tell, I got caught up in what the mkt was doing when I should be looking at what my stock holdings were doing. Coulda, woulda, shoulda, live and learn.
The hard part I re-learned was in essence the trading axiom: trade what you see, not what you think. In detail, I saw my long/short equity portfolio massively diverge from the broader mkt, and correlations break down on the timeframes I was trading. Coming from a global macro background where risk assets usually heavily correlate, and when something doesn't, that's a tell, I got caught up in what the mkt was doing when I should be looking at what my stock holdings were doing. Coulda, woulda, shoulda, live and learn.
Markets have been good for perma bulls, or bulls who just don't get shaken out no matter what. I underestimated how Fed action would initiate this 2003-2007 like complacency/speculative boom. I agree with Druckenmiller that it will end badly. Spreads have been compressing everywhere, vol super low.
It's time to build a good trading plan of trades to put on when it looks like the funds are all heading for the exits. We all have small accounts compared to those guys, we can get in and out first so we hold an advantage. I'm trying to figure out the best ways to play when it looks like the game is over. Figuring out when the game is over is also hard, every 2-5% stock correction looks like the end but then the dip gets bought and everything goes to highs
All-time high for Z today, and a double since that moronic hit piece from Citron a few months back. Congrats to the entrepreneurs at Z focused on building a disruptive and dominating business while geeks in front of screens worry about PE ratios.
Edited to say: Sold my WMT and GOOG today. I wanted to hold onto both for a decade, but the gains are too far too fast. I'll get back in later. If Mr. Market doesn't give me a chance there's always plenty of other opportunities!
Edited to say: Sold my WMT and GOOG today. I wanted to hold onto both for a decade, but the gains are too far too fast. I'll get back in later. If Mr. Market doesn't give me a chance there's always plenty of other opportunities!