AcesTrader

Forever a student of the Market

[darkzodchi @zodchiii]

https://t.co/kx4hKgCVSE

[Anthony Pompliano 🌪 @APompliano]

Mike Green (@profplum99) and I rarely agree on anything, but this piece he wrote is a must-read for every person in business or finance.

One of those things you read and then can't unsee what you learned.

https://t.co/aNFSkNQAVW

[AcesTrader @aces_trades]

@BowTiedBroke 🐻

[Ben Calusinski @BCalusinski]

the single greatest life ‘hack’ that i discovered early-on is to accept objective reality

much like how games have rules that the players are bound to, life has macro 'rules' too, and so do markets

most people are fighting the grain, attempting to make reality mold to their individual perspectives

i see so many people complain about their situations, when, in most cases, you are the one that got yourself in that situation in the first place

this is still the case even if you were unaware of the eventual consequences of your compounding actions

“the market is manipulated! that shouldn’t have happened!”

this is why intelligent people yearn for as much knowledge as possible: you can mitigate substantial life risks (and market risks) by discovering what was previously unknown to you

*side note: it is also fun to learn, but the school system unfortunately taught many that learning was boring by confining content & styles

another point i’ll make on this: there have been tens of billions of humans on this planet and you are trying to convince me that your way is right? lol.

wait till you realize there is no such thing as right or wrong, objectively, and really all that matters is what you care about at an individual level, because how you experience the world is the only thing that matters to the quality of your own existence anyways

we can even increase the quality of our life experience by adding people to our network and mutually reciprocating energy to enhance both of our personal lives simultaneously

but, if you want to do this correctly, you need to be a capable human that provides value and has character

otherwise, you will be surrounded by ‘takers’ who only want to steal from you (time + energy)

character is not something that comes easy though

i posted a story about this concept on my account an hour ago, so feel free to check that out

some sunday thoughts from me... cheers

[Special Situations 🌐 Research Newsletter (Jay) @SpecialSitsNews]

excellent cup

[goodalexander @goodalexander]

The Incremental Buyer (doomer family offices) [long read]

AI and Innovation
the reality is that despite every AI executive saying that AI will result in a health revolution, the Genomics and Biotech ETF is down 34% since 2020. And this is after we got global traction for the largest ever genetic experiment (COVID vaccines).

Jensen goes to Biotech conferences trying to force the matter. Sam Altman and Eric Schmidt frequently talk about synthetic biology development as key "AI use cases"

Bryan Johnson, the largest longevity influencer put $100 million of his money in a longevity focused fund that - if we're to go off his YouTube interview about money - had no returns since 2017. One of its large bets was Gingko Bioworks which is down over 90% since its IPO)

There is not strong evidence, so far, that AI accelerates scientific development in aggregate outside of the development of AI itself. Or at least, generates meaningful financial impact doing so

Consider AI, GDP and immigration. If AI were supercharging productivity - we would have less inflation. Instead, inflation is still above target. GDP is decelerating rather than accelerating despite huge AI Capex. If there were a panacea of wealth from AI - or chatbots could somehow bridge cultural divides - then nations globally wouldn't be increasingly closing their borders. Budgets wouldn't need to be cut - as demand for fixed income in a structurally deflationary environment of abundance would be high.

if AI were an effective teacher at any meaningful scale, then test scores wouldn't be in free fall.

The End of "Blue Sky" Thinking

We're 2+ years in with powerful models available at large scale, globally for free. It's not early days anymore. As of Q4 2024 Nonfarm Business sector productivity is growing 1.2% per year... not nearly enough to justify the "productivity revolution claims" (1950s saw frequent 5-10% jumps).

The structural basis here - that won't change - is the Law of Intelligence Margins. An intelligence margin is that which generates the highest amount of profit per unit of compute. The things with the highest intelligence margins are the legacy distraction economy (Instagram, WeChat, Tik Tok). Robotics and genomics have low intelligence margins.

This would be fine if Tik Tok and Instagram reels didn't cook everyones' brains. But they do. AI makes all the old distraction economy products more addictive. There is a reason that e-commerce and social media companies (BABA and META) are the biggest AI model developers and GPU buyers.

As many managers will also note - AI is also cooking employee brains. Many junior engineers raised in the AI era cannot do things from first principles, and end up building un maintainable code bases. They just click "accept" on every cursor prompt. Some hear "Vibe coding", whereas the wise hear "explosion of technical debt".

This explains - in part - why the big tech companies are implementing hiring freezes despite roaring stock prices. Within 6 months you might as well build an agent instead of a completely AI reliant zoomer/genAI dev.

The Base Case

So - you have this bizarre base case:
1] AI is very much real and probably will eventually accelerate scientific development, including radical longevity ... in the long run
2] On its way there it will probably cook most peoples' brains with AI avatars, customized ads and gaming, pornography, and all supercharged variations of the distraction economy. Or simply by doing their work for them so they're not able to do so themselves
3] Because of #2 AI agents becoming employees (or potentially Robots as well / Waymos etc) -- means that over time, there will be less and less use for people. We already have a mental model for what happens when you have structural unemployment and a good distraction economy. COVID lockdowns. Just accelerates brain cooking.

In short - AI will make some people exponentially smarter and better equipped, while making the vast majority of people dumber more distracted and less capable of generating income.

Education standards are going off a cliff at the same time as AI models are beating better and better evals.

It follows that:
1] The systems that are the result of large scale, compounded stupidity will be worse than those designed and integrated with AI systems
2] It's impossible to integrate AI systems into existing democratic structures because "votes per intelligence level" contradicts fundamentally with democracies' premises. 1 person 1 vote means that even if you make a tiny % of the population super smart, that won't really matter
3] This means the base case is either far right or far left policies - but it's very hard to predict which one. But neither are good and have terrible historical track records. When you adjust for war / genocide, Statism in the 20th century has a higher per capita death count than the most dangerous places on earth in modernity.

And there's no real reason why Statism can't emerge via democratic processes. It just disbands them after it takes effect.

Capital Flight from the Base Case is the Driver of Crypto Demand

This explains in large part why people are buying Gold, not genomics stocks. And why they're buying Bitcoin / XRP instead of new coins with vastly faster and more complex tech. Despite us being in an AI era, that should ostensibly benefit genome research more than medieval metal demand. Or should benefit "A Global Computing Platform" more than "digital gold".

People see the above, and think "hm I better be ready to get out"

This is in large part why I'm so endlessly bullish crypto. Given the above configuration it's somewhat easy to see how things are going to play out.

Assuming the base case is that:
A. AI Ramps power demand (some estimates are 8% of national electricity). It will be inflationary
B. AI distractions debilitate many people to the same extent that it makes others productive. Thus will not meaningfully accelerate GDP growth. The IMF for example sees 2025 and 2026 being below trend growth years compared to the past 2 decades as do most forecasts.
C. AI investment Is an existential risk -- i.e. China and the US must, at a state level continue subsidizing AI's development or risk losing a great power conflict
D. you're already at high debt to GDP levels given this initial configuration, with the largest generation rapidly retiring (but often not dying) with natural birth rates cliffing -

Then the predictable next actions are:
1. Trying to cut fiscal spending in order to prevent the bond market from caving - assuming you're politically popular. But this will make stocks drop and bond market liquidity evaporate unless you
2. Cut banking regulations. Because it's the only way that you can manufacture liquidity while you're trying to cut spend
3. And just in case this all blows up in your face you legalize crypto/ crypto custody at banks with a view to escape in case it all goes south

This dovetails with the current state of crypto.

Bitcoin search volume is between 1/3 and 1/5th of where it was in 2017 - while meanwhile, Blackrock's Bitcoin ETF is the most successful ETF launch in history. with $57B in assets. This is more than Blackrock's 20+ year treasury ETF, TLT with $53 billion in assets despite being around for a little over a year. The incremental buyers have been Saylor and people who couldn't get their head around crypto custody and wanted the ETF. I.e. Not retail.

Think about that. In 1 year Blackrock clients have hoovered up more Bitcoin ETF than the entire NAV of the long term US treasury ETF. This has been a massively successful "onboarding", but crypto twitter has only played a limited part in it.

And if I'm right about the above, the incremental buyer is also not retail. This is - for example - why XRP has a higher valuation than Solana. De-regulation of banking and institutional adoption is a bigger driver than Pump Fun given the macro context. People care about liquid stores of value -- because crypto is a hedge to the world deteriorating, in its current configuration

Where the Puck is Headed (Derisked Institutional Inflow)

You see the above configuration and what ends up happening looks like
1. AI is real
2. It probably won't bail out the economy in the near term so there could be a full scale collapse. And structurally is ambiguous in the long term. Especially if there are big fiscal cuts. Maybe this is wrong but why risk it
3. If AI disruption results in adverse political outcomes (socialism, fascism, etc) I probably need to get my money out of the country.
4. Crypto is the best way to do so. It didn't used to be because of Operation Chokepoint. in 2023 if I tried to buy $500m of crypto I'd end up on multiple government lists. Now big banks like Citi are getting configured to custody it
5. Now that the POTUS has launched a meme coin and has billions in SOL, + operation chokepoint is removed -- and I won't lose my family office primer brokerage for trading crypto. I can do other things than buying the BTC ETF for the next 4 years
6. Every ultra high net worth individual is in the exact same situation as I am

Previously, the market was front running Trump's announcements about crypto de-regulation. But from a liquidity perspective we were very much still PVP. So there was a big positioning unwind because everyone was long and are now getting chopped to death. The reason why the market *was* PVP was because crypto custody wasn't really configured until this past week.

Meaning that the type of buyer that jammed $57B into Bitcoin ETFs wasn't comfortable or capable putting money into alts. But now that these buyers are here and are increasingly going to be able to buy alt ETFs I anticipate momentum picking back up. A rising tide lifts all boats.

Where does this end up long term?

If human governance structures are structurally impaired by an AI enhanced distraction economy, then the question isn't just how to move assets out of the system. The question is how to use AI to build an effective new system that can permanently license IP and tech back to the impaired, legacy systems

Maybe I'm wrong, and in a year or two we all have robotic maids, nannies and bio research labs are churning out scientific developments with O3 that make us thin and productive. And keep the legacy governments well funded and prosperous. But at some level, if you've read this far you probably know there's a decent chance I'm not wrong. And if there's even a decent chance I'm not wrong, there are going to be $10s of billions of inflows into an asset class that has never seen that type of thing before.

What's the trade.

So yes, I'm still bullish - especially on US based banking focused projects in crypto. The banks see the same thing you and I do and are going to act, aggressively to capitalize on this to serve their top clients. So yes, XRP - but there are a large number of other projects featured at institutional finance events and I'm bullish on all of them because they're at the epicenter of where the inflows are going to hit.

Pricing oracles, Defi, yield products, and yes -- reasonable AI projects. But I think -- on a go forward basis you're going to want to ask, "Could I see a family office buying this coin?" as the primary single question worth asking. Many family offices got rich off gambling so if they want meme coin exposure they're just going to buy BNB, pump fun and Hyperliquid not the underlying 'assets'.

This is not an environment most people are going to thrive in because we haven't seen it before. So I wrote this because I want people to have a better mental model and don't miss out on huge gains.

The doomer family office bid is going to be something to behold.

[AcesTrader @aces_trades]

@thetastowe42 @Trash_Trader_ @Topstep Correct ✅

[PiQ @PiQSuite]

Hits deep.

[Steve Byrne @stevebyrnelive]

One of my favorite BLUNDERS. Watch my Crowd Work Specials FREE & exclusively at @punchuplive LINK https://t.co/ciIKIbYXuq #comedy

[Avichal - Electric ϟ Capital @avichal]

Ironic that we got free AI from a hedge fund and $200/month AI from a nonprofit.

[𝐄𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐭 𝐌𝐚𝐫𝐤𝐞𝐭 𝐇𝐲𝐩𝐞 @EffMktHype]

Sam seeks long into the deep and the deep seeks back

[MetaaL @MetaaL_]

You are missing moves because you didn't prepare for potential outcomes.

You don't prepare because you don't have a playbook of how to capture market moves.

You don't prepare because you think you can sit in front of screen and click button based on intuition.

It leads to you clicking button when there is nothing to do, because you have fomo about the trade you never prepared that is now working. You are trying to make up for it with random thoughts and setup that aren't defined, while cranking up the leverage.

That's why your equity curve is going bottom right instead of top right.

Get good or get fucked.

[Leo @LeoTheTiger]

The number one question I get asked is "how do I add to winning trades"

This is my response.

You know how you get in a losing trade and you add and add until you blow your account?

Do the opposite of that.

Now you know how to add to a winning trade...

[Doublewide Capital LLC @DoubleWideCap]

Equal weight S&P 500 with 9 red candles.

[Brian Lee @BrianLeeTrades]

Here’s my daily, weekly and monthly review routine:

Note: I built this routine by asking myself the question (when I was new), “what would a professional trader’s routine look like?” I believe it stood the test of time and asking yourself questions like this can put your mind in a creative state. Secondly I distill the day into the very key components I believe matter (execution, data from said execution aka performance and context). Lastly, I believe all great things come from doing the small things well and meticulously… There are no shortcuts besides putting in the time and sacrifice that others will not.

Daily (M-F) After Hours [15m-1hr]:
-Screenshot all execution charts
-Screenshot all charts on my TOS platform on multiple time frames, this includes any stocks that I’ve scanned regardless of if I traded or not
-Import execution data and logs from broker to google sheets and parse it to form full trade by trade breakdowns on wins and losses, also organized in order

One ticker at a time
-Contextualize setup in terms of pillars and make sure I cross reference my realtime notes or logs regarding setup quality/analysis when originally seen.. make any corrections or adjustments with post-market clarity
-Review execution data alongside execution chart and charting software/screenshots for clarification if any questions arise
-Make sure each trade (1-by-1) was precisely executed and note any mistakes
-Write any context of the setup, thoughts or feelings about the trade (I only need 1-3 broken sentences/points)
-Review any missing context or details, more thorough comb of convoluted filings, news or unanswered questions
-Repeat for each unique ticker I personally traded

Overall
-Review any extraneous setups whether or not I missed for any reason or would like to reverse engineer
-If reverse engineering candidate(s) then I run through personal playbook for any analogous strategies or systems, look to backtest and also fully vet the context of the trade by all pillars (technical, fundamental, news and cycle). I then prepare a system to capture the move in totality if I see it again.
-I check my execution data for the day and check metrics like average win/losses, win rate and misc information like fees, # of trades and general stats
-I copy those data points into a monthly database into four columns: win in $/R and loss in $/R
-Those cumulative data points then feed into some cells already preconfigured to find the averages, win/loss ratios and % etc.. I check if all of it is tracking or if any outlier behavior compared to prior months
-Finally I write any notes I have and note down any events to archive context for the future

Weekly (Weekend) [2-3hrs]
-Start from first days journal page and review all charts and executions one by one, day by day
-See if missed anything or can see with new refreshed eyes
-Spend additional time on deep-dives, analysis or projects I postponed due to time

Monthly [4-8hrs]
-Review every single day from start of the month repeating same formula as weekly method
-See cumulative result of the month including my data collection and review outcomes of any changes made and contextualize month in terms of cycle, expectations, themes and overall performance

I will almost never skip a review unless life gets in the way or taking time off completely.

[M Lebon @LongTplexTrader]

Was having a conversation (well a couple) with a few traders on this app. Got me thinking of my worst draw downs. My worst DD's come when I don't adjust for regime change. What I mean is if a low vol environment I can push and shove in a range & I can get outs if I get in trouble. But when a slight vol regime starts that's when trend moves emerge. This (in the past not so much now) had me trying to fade or play like I did in low vol regimes. That's....death, all that happens is you add to bad trades and the loss expands much larger than one can imagine. The tuition I paid to lean not to do such stupid things is well over 7 figures (I do not lie, not exaggerate here).

[Michael Hunt @Mike_Hunt_Sr]

anon, people are literally tasing themselves to raise their shitcoin mkt cap and you are bearish!?

[Brian Lee @BrianLeeTrades]

I am starting to realize that there are two and a half dominant trading mentalities and it can be boiled down to these:

1) Casino mentality: Treating trading as one is the 'house', emphasizing edge and the law of large numbers. This philosophy emphasizes consistency, time and math. The house edge exists within casino games by taking marginal % advantages over the player, however trading actually has far more edge than +1/2/5%.

Personally I prefer this and I think you can put a lot of my thought processes into this box.

2) Poker mentality: Emphasizing and extrapolating the game of poker towards the game of trading and using this philosophy to guide major decisions such as bet sizing, opportunity and bankroll management.

Undoubtedly analogous to trading in many ways, I think this one makes the MOST sense to the MOST amount of people because of the parallels. It also makes the MOST sense because making money with large wins and minimizing losers is easy to understand.

2.5) Dumbass gamblers: Philosophy is centered around winning at all costs, willing to forsake trading convention and ego-driven decision making. Goals are egregiously large, imagine big losses as "bad luck" and would use martingale as their primary strategy if given unlimited resources.

The allure of financial markets is that any fool can appear a genius given the right set of circumstances.

The thing that #1 and #2 share is intentionality and adherence to a set of principles that guide decisions. Both are equally able to navigate markets because there are fundamental systems that are derived from mathematics and profitability is largely a numbers game with some bells and whistles.

Think on it!

[AcesTrader @aces_trades]

@ftraderft @Theta_Thursday Bet more

[Thursday @Theta_Thursday]

Lol