Digger

Cross-Asset Micro/Macro

Just following the commet mate

[Digger @globalm1cro]

https://t.co/M2Aj2zmGki

[Steve Burns @SJosephBurns]

“Frankly, I don’t see markets; I see risks, rewards, and money. If you diversify, control your risk, and go with the trend, it just has to work.” - Larry Hite

[Digger @globalm1cro]

@ContrarianCurse I love markets. Because “markets are just positions.”

[Capital Flows @Globalflows]

The crypto establishment has completely lost the hearts and minds of the younger generation

Traditional Wall Street firms won’t take actual risk because they’d rather create financial products to churn fees

This has created a massive gap that is currently being filled by authentic risk takers who have developed specialized knowledge and they now have enough leverage via AI to run everything themselves

[Digger @globalm1cro]

@investingluc ‘Cheap’ lingerie vs ‘expensive’ lingerie

@AntonKreil

[Luc @investingluc]

Strong stocks get stronger infinitely more often than weak stocks become strong.

Read that again….it’s a realization that completely changed my trading.

It’s way better to join the dance floor when the DJ is already playing bangers, instead of before the music even starts.

[CJ @IntlSpeculator]

An article on Jesse Livermore from a 1908 issue of Richard Wyckoff's magazine, "The Ticker."

The Secret of Success

"My success thus far has not been in any sense due to luck, but solely because I started out early to make a life study of the market." — Jesse L. Livermore.

In a recent interview, Jesse L. Livermore, who was reputed to have made a million on last year’s break in the stock market and several hundred thousand dollars in a recent cotton deal, gave a few of the reasons for his success.

"It was not a matter of luck," said Mr. Livermore. "Any one who figures that his success is dependent upon chance, may as well stay out of the market. His attitude is wrong at the very start. The great trouble with the average speculator is, he thinks the market is a gambling proposition. This has been the mistake of most speculators who have risked their all in the stock market. As a result, we see thousands of ruined careers.

"A trader should realize at the outset that speculation is a profession, just as the study of law or medicine is a profession; that certain rules apply to it that are to be studied as closely as if he were a law student preparing for the bar.

"Many people attribute my success to luck—chance. The fact is, speculation was born in me and for fifteen years I have studied this subject closely; you might say I have given my life to it, concentrating upon it and putting into it my very best. The requisites for a successful speculator are: Insight and intuition; one must have a talent for it, must make the subject a study, must acquire experience, and, what is most important, have the nerve to plunge at the psychological moment.

"Many people believe they can attend to their regular business and trade in the market between times. This is a vital mistake. If they cannot devote their entire attention to the subject, they should let it alone. In my own case, I had a craving for this line of work in my boyhood and my success, thus far has not been in any sense due to luck, but solely because I started out early to make a life study of the market."

[Digger @globalm1cro]

@atelicinvest I remeber listening to an old pod with @SuperMugatu and he touched on this exact point

'value investing is an innoculation'

lol

[Luc @investingluc]

I don’t think enough people are mentally prepared for the possibility that this isn't a bubble at all.

[Paul Enright @pmje73]

Investing in secular change.

If you want to be exposed to a positive secular change don’t buy the inexpensive, safe play. Buy the best and most exposed to the trend.

If you want to be short a secular trend, short the weakest player not the one with the highest multiple or biggest profit pool.

[Digger @globalm1cro]

@alixpasquet Reading More Money Than God without the footnotes is like eating a bacon egg and cheese without the bacon, egg and the cheese…

Masterful literary implementation of footnotes @scmallaby

[Digger @globalm1cro]

Great post. Alpha is in identifying the anomalies that most miss.

That requires daily consistency. Obsession.

Ear to the ground.

[Luc @investingluc]

The most reliable indicator for market direction is things acting weird...baseline behavior vs deviation.

In layman's terms, anytime you think "hmm that's odd".

Experience in markets allows you to know the baseline...what usually happens, normal reactions, the status quo...bc then you know when something breaks pattern.

Few examples.
> good news, but stock sells off
> bad news, stock goes up
> abnormal volume with no follow through
> strong tape, but leaders lag
> typical correlations are off
> perfect setups failing
> sentiment extremely one-sided, prices goes opposite way

The biggest clues are found via *deviations from expectation*...

Know + understand the baseline behavior first…then look for the weird.

[Digger @globalm1cro]

Real men short stocks

[TBU @TBU12345678]

I am often more impressed by someone who can pitch a good short than a good long ("real men short stocks"). I have in the past long held that the best short sellers sit at the Tiger Cubs, but increasingly believe the "next" best short seller currently sits at a pod given incentive structures + ability to stick with a big idea:
- if you work at an SM, a long is 500bps and a short is 50bps. In no world does it make sense to spend an incremental minute on shorts since they can't be sized so performance is immaterial to the fund
- pods conversely always need to be short stocks in size and the reward of catching a big beta name that breaks (e.g., $SMCI in 2024-25) is massive in that you get to own a ton of beta on the other side + you're making nominal dollars on your "funder". catching one of these in any kind of size has a material impact to your year

[Digger @globalm1cro]

"Moral of the story you can just read ten books and expertise is overrated."

@Globalflows LOL

[Just Another Pod Guy @TMTLongShort]

Ironically I take zero macro risk as part of my day job and all my views on geopol are purely because I get bored at night and like to read.

Tech investing is what I’m exceptionally good at but compliance would crucify me if I tweeted about individual stocks.

Moral of the story you can just read ten books and expertise is overrated.

[Digger @globalm1cro]

Great take - the arcana (h/t @gregoryblotnick) of trading has/will continue to be a huge source of outperformance.

[Jigsaw @JigsawCap]

@bucketshopcap Understanding markets / how stocks trade / portfolio construction is still way more critical to behavioral edge / sizing risk than proprietary research imo

[Umir Irfan @umirf1]

Read a quote earlier. A moving man will surely meet his luck. Love it. Keep putting one foot in front of the other. Get your reps in. Review and iterate. Do it for as long as you can and you’ll win, no doubt about it.

[Andrew Mack @Gingfacekillah]

I was going to publish a book on this theme, but it's too much work for basically no money. So this is the main abridged set of themes in an X post.

Use the 4 meta-skills to calibrate your trading.

No edge, no ideas? Your awareness sucks. Observe more, observe better. Refine your perception. Edges exist. Learning to spot them takes a shift primarily in your awareness guided by improved first-principle understanding of how markets work.

Do you hesitate when the setup/opportunity presents itself? Killer instinct problem. Negative self-talk. Doubt. Battle scars. Whatever. Push through it. Get back to the now. The present moment. Read "The Inner Game of Tennis". Fire.

When you're in a trade do you have negative self-talk loops? Feel fear and panic? Exit winners too early? Hold losers too long? Get wound up after multiple losses? Revenge trade? Self-regulation issue. Meditate. CBT. Zen training. Read "Best Loser Wins". Process your own emotions until you can run clean and clear.

Survival is about staying in the game. Sizing. Rule number one. Live to fight another day.

Anyways, I think this is a useful framework. Maybe it'll help you too. Enjoy the weekend 🫡

[John Arnold @johnarnold]

I think I finally solved the stock market.

[Fed @lord_fed]

The most expensive misread in markets right here is thinking AI kills software. I think it gets absorbed by it which is a completely different trade.

Spent several weeks on this post and built a 15 name basket around the idea.

https://t.co/2jGQf1SK2J