CBLE

Mostly asking questions and RTing insights.
L/S small caps value biased.

[CBLE @cble416]

Heyo fuck SEDAR+, all my homies hate SEDAR+.

[CBLE @cble416]

@HedgeFundClips @ForgedUSAPod Thanks

[Pack your bags we're going on a guilt trip @uselesserestyay]

@TeddyGambino Wowsa

[Daily Chartbook @dailychartbook]

"All 3 hyperscalers reported revenue accelerations compared to last quarter."

@fiscal_ai

[Brett Caughran @FundamentEdge]

It is easy as a stock picker to blame the external environment. "My portfolio sucks because the market is all about AI and retail flows".

I had an experience with this early in my career that stuck with me. The investment team was bemoaning the macro driven market (this was '08/'09), citing high correlations as a challenge to L/S spread generation.

The head of the fund responded with a table of realized stock price dispersion, "our job is to, ex-ante, identify the winners and the losers...and I don't know about you, but I see a lot of spread potential in this analysis". The message was clear: winners don't complain, they figure it out.

This was a clear pattern I saw in the best PMs I worked with over my career. They didn't complain, they just figured it out. The job of a L/S PM is to find spread between longs & shorts, wherever it is.

They adapted to the market environment when necessary.

I saw this in real time when I was a PM at a large multi-manager. Sure, great PMs would have drawdowns as market conditions would change, but they were flexible when needed, flowing with the market regime to make money in new ways. Sort of the antithesis of the calcified value investor "I have one way of making money, buying cheap assets, and I'll go to my grave doing so".

And even in this AI & retail driven tape, there is plenty of evidence of dispersion. In my healthcare coverage of 152 names, 75 of them have of them have hit threshold returns this year (longs up over 25% and shorts down over 15%), only halfway through the year. A few of these are AI-influenced, but the vast majority are idiosyncratic and business/industry driven moves that could have been identified with the right research (of course, it's always clear in hindsight).

There is plenty of spread potential in this tape, you just have to find it.

(Caveat: it's insanely hard. But it should be, as the rewards to consistently generating 5%+ long/short spread in equities are immense. And I fully grasp that I am shouting this message from the sidelines, not "in the arena", so evaluate this message as such)

[ Q-Cap  @qcapital2020]

Leopold Aschenbrenner's fund is now as big as @BillAckman and @DanielSLoeb1 and is up +1,000% since inception

This is legitimately insane LOL

[CBLE @cble416]

@MartinShkreli Shkrelz, big dog, ex head thot patrol, we need your detailed opinion on the IPOs. What do I tell my PM (my wife)?

[Kevin Roose @kevinroose]

Overheard at an AI lab: "how are you spending the last 300 days of work?"

[Marhelm @MarhelmData]

The crisis is certain

[Josh Young @JoshYoung]

Oil shorts as the Iran war restarts

[Phil MrOil @PMroil]

Plunging oil prices during the peak demand period of the US summer driving season will only increase demand further. This during an oil supply crisis with massive US inventory draws?
#oott

[CBLE @cble416]

@PMroil 🌌 🧠

[Eric Nuttall @ericnuttall]

The Strait remains closed, yet oil has sold off $18/bbl due to impressively effective jawboning by the Whitehouse. Even if a deal emerges and things open in July, we will still forfeit ~2BN barrels of production and inventories will still be drawn down to record lows.

[Buy High, Sell Low @tradeoilstocks]

“Give them a massive amount of oil, agricultural land, copper, freshwater, and every natural resource in the world. Now make them neighbors with the biggest market in the world. Great, now have them leave the resources in the ground and instead flip condos to each other”.

[CBLE @cble416]

@GrumpierBTDay @Henrik115 Everything?
Insightful...

[John Arnold @johnarnold]

Curious how Jane Street made $40 billion last year with few negative days? Here’s one example:
- Between 1990-2000, there was only one exchange-listed product to trade natural gas: the NYMEX (now CME) physically-settled futures contract
- In 2000, ICE realized there was demand for a financially settled (swap) futures contract and introduced it
- CME countered and listed their own swap future

At this point, the products were primarily for institutional and sophisticated individuals with a commodities account. But as commodities boomed in the 2000s, exchanges created new contracts to increase access and appeal to retail traders.

- the NYSE introduced an ETF (UNG) that followed natural gas prices in 2007
- More ETFs followed that offered ability to bet on a price decline and to get 2x or 3x leverage
- CME introduced a mini contract that was 1/4th the size of the original

The next evolution was to appeal to the pure speculator by expanding the market to less regulated exchanges, widening access globally, increasing leverage, and creating daily bets.

- CME introduced the micro contract that is 1/10th the size of the original
- CME and ICE introduced contracts that expire each trading day
- Hyperliquid and Binance offer unregulated, on-chain, high leverage, perpetual nat gas contracts for non-US uses
- Kalshi offers same day binary contracts. Other prediction markets are moving forward as well.

Now add other iterations on settlement days for the contracts and options on everything listed above.

Note that all of these contracts settle (perps notwithstanding) against the original CME physical futures contract. But instead of one way to trade the product, there are dozens. This creates an opportunity to make markets across all of these surfaces and arbitrage among them. And that's what Jane Street and other similar HFT shops do (among many, many other things).

Nat gas for delivery at Henry Hub, Louisiana is just one product. Take all the ways to trade equities, currencies, commodities, crypto, interest rates, etc across all the different exchanges in all the jurisdictions and the opportunity of making $50 here and $1000 there adds up to an enormous, low-risk money making machine.

This opportunity originates from the large variety of ways people desire to trade random financial instruments and the various products designed for them. This creates a hugely profitable opportunity for the HFTs. They provide a valuable service of creating liquidity for those seeking to trade. Whether that trading is smart and profitable for the average punter on the other side is a different story.

[CBLE @cble416]

@dominicdeecoco It didn't require an AK.

[CBLE @cble416]

@Coastal_Kiid @stephmase22 Wouldn' t be surprised if that goes nowhere. But, that's above my paygrade. I'm also not sure that there's anything wrong with a naked short given a pending borrow/delivery. I would assume that those guys can source the borrow.

[CBLE @cble416]

@Coastal_Kiid @burrytracker What fuckery, they are maintaining the road, which you are fres not to use, and taking for a toll.

[CBLE @cble416]

@YellowLabLife No.