Global Macro Trading Journal

Its a tough time for macro:
"Dalio's fund had peak returns of 45% in 2010 and 25% in 2011, but has struggled since then. His flagship fund returned an annualized 3.8% since the beginning of 2012, even with last year's 15% gain. This lags other well known funds like Jeff Talpins’s Element Capital Management and Tudor Investment Corp."

That is the alpha fund they are referring to. I think his beta 'all-weather fund' is doing a lot better with a return closer to 10% since then (but dont quote me on that)

My strategy during this bad macro environment is to do a beta type strategy akin to the all-weather strategy (though with my own twist), eak out my 5-10% a year and save my discretionary bets for a time when there are some real macro dislocation and its time to pull out the guns to make real cash
 
I just tripled my position in Greek stocks, also bought some for my swing account. I like the chart, I like their economic numbers and I like the fact that no one is talking about Greek stocks
 
Finished 2019 with a pretty nice return of 19.7%, a few percentage points ahead of my 'benchmark' the Dalio All Seasons portfolio. In terms of portfolio contribution the main contributors were:

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Since pretty much everything was ripping up, I had no significant losses. I did lose a little on a SPY short late in the year and my TSLA put also lost some but is part of the plan. One of my rules is to risk 1% a year in shorts/puts in order to help hedge the downside of my portfolio. But other than that it was an easy year for those long a passive portfolio of well selected assets.

One of the reasons for these 'easy' returns were the fact that markets imploded late in 2018 and started 2019 from a low base, making it easy for them to pop back up, and also the Fed somehow found reasons to ease with unemployment at 3.5% and inflation at target. In 2018 IIRC I had a 0.5% return because all my 2018 YTD returns were wiped out on Q4. In 2019 I got them back and then some.

I suspect big returns will be hard to come by going forward, in Brazil everything is flying higher, real interest rates are 3.5% going out 30 years which is an all time low historically. REITs are also going through the roof. In the US, valuations are also starting to get stretched. In any event I will try to cap my risk assets at 30-40% because I feel like its starting to make sense to take some money off the table and derisk a little. I'm looking forward for 2020, FNMFN preferred, BTC and my Greek stock position could be big gainers with limited risk, the sort of assymetry I like to invest in. Happy new year
 
I'm taking advantage of this strong stock market to rebalance out some US and Brazil equity exposure and buy Chinese equities. Meaning I'm selling 10% of some positions here and there (PSH, EWZ, etc) and buying some Chinese ETFs. I'm very long-term bullish on China and this virus thing looks like a good dip to start buying into. If there is any country that can control this its China, I mean, people have no rights there, they will put entire cities into cages if necessary (which is very different from Congo)
 
One thing that makes me bullish is the fact that the stock market has gone nowhere for more than 1 decade

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Meanwhile the economy and profits have boomed. Equities are 50% bellow their all-time high, that's usually a good time to buy. Another reason if the fact that China has such a great story, I bet there will be another equity bubble there in the next 10 years. I will profit and sell into that bubble
 
These chinese stock ETFs are pretty interesting.

They trade at 14-18 PE ratios(12 forward PE for the MSCI China Index), 2% div yields, 1.7 book value and they are off more than 50% of their all time highs. That in a world of zero to low interest rates. And most investors dont seem to care about them. Especially in the US. They always have a list of 10 reasons why they shouldn't buy, but that list always exists no matter what stock market you are looking at!

The same way one could have come up with those reasons during the US bull run from 2009, and they would have been wrong every year.
Every year "analysts" like Gary Shilling and Rosenberg would go out and list all these 'risk' factors, well of course there are risks, thats why you get paid a premium over fixed income! That same thing is true in China with folks like Chanos

I urge my readers here to consider allocating some of their stock exposure to China ETFs (I can list the ones I'm using if anyone wants it). This corona thing is a joke, its the stuff for day and swing traders. The long-term value of equities is determined by the present value of future cash flows into infinity, a couple of bad quarters make little difference to its final value. I have written about that here before and anyone can confirm that using a simple DCF. So fundamentally, the corona virus thing makes little to no difference. Remember when Charlie Munger went to cash because there was a virus outbreak in the US in the 60's? Of course not, that never happened because, as an investor, avoiding stocks because of a virus is suicide

If anything, if China tanks 20% from here, its an opportunity to load the boat more than anything. There I said it
 
Daal said:
These chinese stock ETFs are pretty interesting.

They trade at 14-18 PE ratios(12 forward PE for the MSCI China Index), 2% div yields, 1.7 book value and they are off more than 50% of their all time highs. That in a world of zero to low interest rates. And most investors dont seem to care about them. Especially in the US. They always have a list of 10 reasons why they shouldn't buy, but that list always exists no matter what stock market you are looking at!

The same way one could have come up with those reasons during the US bull run from 2009, and they would have been wrong every year.
Every year "analysts" like Gary Shilling and Rosenberg would go out and list all these 'risk' factors, well of course there are risks, thats why you get paid a premium over fixed income! That same thing is true in China with folks like Chanos

I urge my readers here to consider allocating some of their stock exposure to China ETFs (I can list the ones I'm using if anyone wants it). This corona thing is a joke, its the stuff for day and swing traders. The long-term value of equities is determined by the present value of future cash flows into infinity, a couple of bad quarters make little difference to its final value. I have written about that here before and anyone can confirm that using a simple DCF. So fundamentally, the corona virus thing makes little to no difference. Remember when Charlie Munger went to cash because there was a virus outbreak in the US in the 60's? Of course not, that never happened because, as an investor, avoiding stocks because of a virus is suicide

If anything, if China tanks 20% from here, its an opportunity to load the boat more than anything. There I said it
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Best post on ET 2020.
thnx... brilliant.
You are 100% right, just let time do its thing and avoid margin.
2 thumbs up and then some.
 
I am exceedingly bearish on global indices, but coronavirus is a joke. >10K deaths in the US during this flu season alone.
 
Last edited:
PoopyDeek said:
I am exceedingly bearish on global indices, but coronavirus is a joke. >10K deaths in the US during this fly season alone.
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He's right af d... but it may take time. This is a HUGE buying opportunity. Its a great call.
China's going up. Just give it some time.
Pffff... you know I never say that about posts here.
This one is a gem. My gut... best call here I've ever read.
 
vanzandt said:
He's right af d... but it may take time. This is a HUGE buying opportunity. Its a great call.
China's going up. Just give it some time.
Pffff... you know I never say that about posts here.
This one is a gem. My gut... best call here I've ever read.
More...


I am taking action on YoY O/U struck at SPX 3,335. We will be under 3,000 before the year is up.
 
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