SavvyCapital

Corporate Credit Aficionado | Yield Curves | Macro | Technicals | Geopolitics | Toronto Raptors | #BetOnYourself #DoBetter #BeBetter

[SavvyCapital @JuliusJayJules]

Be informed before being opinionated

[Bloomberg TV @BloombergTV]

Mike Wilson, Morgan Stanley's chief US equity strategist and CIO, explains the recent market volatility is part of an ongoing rotation among cyclical and commodity sectors https://t.co/KznOeK1skD

[Financelot @FinanceLancelot]

Have they engineered the greatest bubble since 1929?

[SavvyCapital @JuliusJayJules]

@grok @Kacper_PK_CH @grok what is the exact date 48bdays from today?

[SavvyCapital @JuliusJayJules]

@tonycfa @bespokeinvest @zerohedge Precisely, 2026 is not the year to be concerned. 2027 however is gonna be dousy

[Bespoke @bespokeinvest]

Sector relative strength charts:

Tech up, everything else down.

This won't last forever.

[Michael Sikand @michaelsikand]

SpaceX IPOs in 17 days.

But you don't own a single share.

This ETF $XOVR holds a 21.5% SpaceX stake marked at $1.5T as of 5/22.

That's over $0.20 of every $1 invested.

Here's why $XOVR might be the best way for retail to play the biggest IPO ever. Read disclosures at 0:53.

[Investment Wisdom @InvestingCanons]

Druckenmiller: “It’s what my former partner George Soros was so good at, and we call it, if you follow baseball, it’s a slugging percentage as opposed to batting average.”

Thesis. Initial positions. Validation. Pile in.

The full interview:
https://t.co/B4seh09ag8

[Acyn @Acyn]

Wow Bret Baier plays Trump’s statement where he said he doesn’t think about Americans’ financial situation.

Trump’s Response: That’s a perfect statement. I’d make it again.

[Warren Pies @WarrenPies]

For the first time this cycle, the implied December 2027 SOFR rate is above the current Fed Funds Rate.

The rate cut cycle is officially in question.

[Ihtesham Ali @ihtesham2005]

A Hungarian psychologist raised three daughters to prove that any child could become a chess grandmaster through early specialization. He succeeded. Two of them became grandmasters. One became the greatest female chess player who ever lived.

Then a sports scientist looked at the data and found something nobody wanted to hear.

His name is David Epstein. The book is called "Range."

The Polgar experiment is one of the most famous case studies in the history of deliberate practice. Laszlo Polgar wrote a book before his daughters were even born arguing that geniuses are made, not born. He homeschooled all three girls in chess from age four. By their teens, Susan, Sofia, and Judit were dominating tournaments against grown men. Judit became the youngest grandmaster in history at the time, breaking Bobby Fischer's record. The story became the gospel of early specialization. Pick a domain young, drill it hard, and you can manufacture excellence.

Epstein opens his book by telling that story honestly and then quietly demolishing the conclusion most people drew from it.

Chess works that way. Most things do not.

Here is the distinction that took him four years of research to articulate, and that almost nobody who quotes the 10,000 hour rule has ever read.

There are two kinds of environments in which humans develop expertise. Psychologists call them kind and wicked. A kind environment has clear rules, immediate feedback, and patterns that repeat reliably. Chess is the cleanest example. Every game ends with a winner and a loser. Every move is recorded. The board never changes shape. The pieces never invent new ways to move. A child who plays ten thousand games will see most of the patterns that exist in the game, and pattern recognition is exactly what chess mastery is built on.

A wicked environment is the opposite. Feedback is delayed or misleading. Rules shift. The patterns that worked yesterday may be exactly the wrong patterns to apply tomorrow. Most of the real world looks like this. Medicine is wicked. Investing is wicked. Building a company is wicked. Scientific research is wicked. Almost every job that involves a complex changing system with humans in it is wicked.

The Polgar sisters trained in the kindest environment any human can train in. Their success was real and the method was correct. The mistake was generalizing the method to fields where the underlying structure of the environment is completely different.

Epstein's research is what made the implication impossible to ignore.

He looked at the careers of elite athletes outside of chess and golf and found that the pattern was almost the inverse of what people assumed. The athletes who reached the very top of their sports were overwhelmingly people who had played multiple sports as children, specialized late, and often switched disciplines well into their teens. Roger Federer played squash, badminton, basketball, handball, tennis, table tennis, and soccer before tennis became his focus. The kids who specialized in tennis at age six and trained year-round for a decade mostly burned out, got injured, or topped out at lower levels of the sport.

The same pattern showed up everywhere he looked outside of kind environments. Inventors with the most patents had worked in multiple unrelated fields before their breakthrough work. Comic book creators with the longest careers had drawn for the most different genres before settling. Scientists who won Nobel Prizes were dramatically more likely than their peers to be serious amateur musicians, painters, sculptors, or writers.

The skill that mattered in wicked environments was not depth in one pattern. It was the ability to recognize when a pattern from one domain applied unexpectedly in another. That kind of thinking cannot be built by drilling a single subject. It can only be built by accumulating mental models from many subjects and learning to move between them.

The deeper finding is the one that should change how you think about your own career.

Specialists in wicked environments often get worse with experience, not better. Epstein cites studies of doctors, financial analysts, intelligence officers, and forecasters showing that years of experience in a narrow domain frequently produce more confident judgments without producing more accurate ones. The expert builds elaborate mental models that feel comprehensive and turn out to be increasingly disconnected from the actual structure of the problem. They stop noticing what does not fit their framework. They mistake fluency for understanding.

Generalists do better in wicked domains for a reason that sounds almost mystical until you understand the mechanism. They have less invested in any single mental model, so they abandon broken models faster. They are used to being a beginner, so they are not threatened by the discomfort of not knowing. They have seen enough different domains that they can usually find an analogy from one field that unlocks a problem in another. The technical name for this is analogical thinking, and the research on it is one of the most underrated bodies of work in cognitive science.

The single most useful sentence in the entire book is the one Epstein puts almost as a throwaway.

Match quality matters more than head start.

A person who tries six different fields in their twenties and finds the one that genuinely fits them will outperform a person who picked one field at fourteen and stuck to it on willpower alone. The lost years were not lost. They were the search process that produced the match. Every field they walked away from taught them something they later imported into the field they finally chose.

The reason this is so hard to accept is cultural, not empirical. We tell children to pick a path early. We reward the prodigy who knew at six. We treat the late bloomer as someone who failed to launch on time, when the data suggests they were running an entirely different and often more effective optimization process underneath.

The Polgar sisters were not wrong. The conclusion the world drew from them was.

If your environment is genuinely kind, specialize early and drill hard. If it is wicked, and almost every interesting human problem is, then the people who win are the ones who refused to specialize until they had seen enough to know what was actually worth specializing in.

You are not behind. You were running the right experiment all along.

[Michael Weiss @michaeldweiss]

NYT reports that Iran has access to 30 out of 33 missile sites along the Strait of Hormuz, access to 90% of its missile storage facilities, and retains 70% of its prewar missile stockpile. Explains the hostility even Republicans brought to the Hegseth/Caine hearing today. https://t.co/snZMXMYhKa

[Compound248 💰 @compound248]

Question:

What are the highest quality companies with stocks trading near multi-year lows?

What should we be evaluating today that people seem to be throwing out?

International companies welcome (LVMH, looking at you)!

[Acyn @Acyn]

Trump on Iran War:

Reporter: What extent are Americans’ financial situation motivating you to make a deal?

Trump: Not even a little bit. I don't think about Americans’ financial situation

[SavvyCapital @JuliusJayJules]

@Acyn @TheDemocrats here is your ad for the midterms. Don't fuck it up. The world is counting on you to but some checks and balances around this madness.

[SavvyCapital @JuliusJayJules]

@RyanDetrick Druk amd Tudor Jones missing?!

[SavvyCapital @JuliusJayJules]

@IlliquidInsight @_themarketbrief Its pressuring the spreads of META and ORCL specifically. All other hyperscaler spreads are at or near tights. Mkt doesn't trust that META and ORCL can easily and quickly monetize all this capex.

[Patrick OShaughnessy @patrick_oshag]

Paul Tudor Jones says the US is more dependent on equity prices than ever, and explains what a 35% correction would trigger in the economy:

"We're 252% of stock market cap to GDP. In 1929 we were 65%. In 1987 we got to ~85-90%. In 2000, 170%.

If you think about the periodicity of significant bear markets. Since 1970, we get a mean reversion about every 10 years.

Let's say mean revert to the past 25 or 30-year PE. That would be a 30, 35% decline. Well, 35% on 250% of GDP is 80, 90% of GDP.

10% of our tax revenues are capital gains, they go to zero. So you can see the budget deficit blowing up. You can see the bond market getting smoked. You can see this kind of negative self-reinforcing effect.

In the stock market, we're over-equitized as a country. We have the highest individual equity weightings in the history of the country.

And then the real problem is if you look at private equity in 2007-2008, that was about 7% of institutional portfolios. Now it's about 16% of the institutional portfolios. We're so much more illiquid than we were in 2008.

The problem is that if you buy the S&P at this current valuation, the 10-year forward return is negative when you buy the S&P with a PE of 22. That's what history shows.

So yes, the S&P is spectacular long-term, if you have a hundred-year view. But that's because that's an average of a hundred years, including times when the S&P 500 PE was 6, 7 and 8, or one third of what it is right now.

Valuation matters a lot, and the stock market's really high and it's gonna be really hard to make money from here with any kind of long-term view."

[SavvyCapital @JuliusJayJules]

@elonmusk For someone so smart you say alot of obviously stupid things. AI is so important that governments should bankrupt themselves via UBI to ensure its deployement? And you dont suspect that humans left to feel inept and underemployed won't turn to crime and other nafarious acts?

[Linton Worm (🍏,🪱) @LintonWorm]

S&P 500: WYCKOFF IN PROGRESS

We just locked the Secondary Test right at the resistance

The distribution structure is forming with surgical precision

1. Buying Climax - Behind us
2. Secondary Test - Confirmed at the highs
3. Current State - Expecting a rejection from ATH

The range is being built

We are looking for the move toward the Upthrust to trap the final liquidity

NOTIFS ON!

[The Chart Report @TheChartReport]

Midterm election years have historically tended to peak around now.

@NautilusCap