Jake Wade

winning fixes everything

[Jake Wade @jakeawade]

@OddStockTrader Link isn’t working now. Is it still available?

[Jake Wade @jakeawade]

@smizonx MELI

[THE SHORT BEAR @TheShortBear]

NOTES: PTJ on trading, investing, macro

Core trading philosophy

-You make the biggest money by riding a major trend for a very long time.
-Trading is like boxing: most of the time you are jabbing, feeling out the market, waiting for a clean opening.
-The real money comes from a few “knockout” opportunities.

Examples:
Bitcoin in 2020.
Short two-year notes in 2022.
Precious metals moves.
Potential yen rally setup.

Trader vs investor

-Investors can win by believing in a long-term compounding story.
-Buffett represents the ideal investor mindset: believe in America, tolerate 50% drawdowns, let compounding work.
-PTJ says he envies that belief system but does not naturally have it.
-His own approach is more trench warfare: daily, active, defensive, alpha-driven trading.
-His fund reportedly had a negative correlation to the S&P 500, so he sees his returns as alpha, not beta.

Compound interest

-He now deeply respects Buffett as “the OG of compound interest.”
-Buffett understood compounding at age nine.
-PTJ says he underappreciated compounding for much of his own career.

Charlie Munger’s key contribution: moving Buffett from cheap “50-cent dollars” toward great companies that compound.

Risk management

-Every great trader or investor is first and foremost a risk manager.
-Liquidity is central: “You’re only worth what you can write a check for tomorrow.”
-Seeing Brother Hunt go from one of the richest men in the world to nearly bankrupt after silver collapsed (within weeks) permanently shaped PTJ’s view.
->He learned never to trust any asset blindly.
-Avoid being trapped in illiquid positions when volatility explodes.
-AI worries him because the world is deploying it with little risk management despite huge tail risks.

Market opportunities

-Big opportunities usually come from:
-Markets getting too carried away.
-An imbalance lasting too long.
-A central bank doing something wrong.
-A government doing something wrong.
-Crowded complacency.
-An undervalued, underowned asset finally getting a catalyst.

Catalyst framework

His ideal macro trade seems to need:
1. Something underowned.
2. Something undervalued.
3. Something “way out of whack.”
4. Market complacency.
5. A catalytic moment.

Example: yen.
Yen is grossly undervalued.
Japan has a huge positive net international investment position.
Much of its foreign exposure is in the US and unhedged.

->A new dynamic, “Japan first” political leader could be the catalyst. (which just got elected. See Buffett major buys into this year)

He compares potential currency appreciation to what happened under Reagan, Thatcher, or Trump-style leadership shifts.

Example:2022 two-year note trade

-He believed there was too much fiscal stimulus.
Powell stayed too easy for too long.
-Once Biden reappointed Powell, PTJ saw it as “go time” to short two-year notes.
-The logic: the Fed would have to normalize policy.
Bubbles and valuation

Valuation matters.

-Buying the S&P 500 at very high valuations historically leads to poor or negative 10-year returns.
-He mentions an S&P P/E around 22 as historically dangerous for forward returns.
-The S&P is excellent over 100 years, but that includes periods when valuations were extremely low.
-Starting valuation drives long-term returns.
-Today’s market is harder because valuations are high.
-He sees public equities, private equity, real estate, and infrastructure as much more heavily owned than in 2007 to 2008.
-Private equity exposure in institutional portfolios has risen materially, creating more illiquidity risk.

Execution

-Execution is about buying when there is fear and selling when there is euphoria.
-“Am I buying when there’s blood on the ground?”
-“Am I selling when there’s complete elation?”
-Great execution requires intense focus on intraday highs/lows and pain points.
-You need a plan before the market opens.
-The plan should be self-executing when volatility hits.
-Being two or three hours late can be materially costly.
-Information overload damages execution quality.

Information overload

-Modern trading is harder because there is too much incoming information.
-Emails, news, and signals distract from observing price, fear, greed, and positioning.
-In the pit-trading era, he could focus more purely on market behavior.
-Today, macro traders must fight distraction to maintain execution quality.

Traits of great traders

-He thinks great traders are about 70% born, 30% made.
-Key traits:Type A personality.
-Intense curiosity.
-Love of competition.
-Love of games.
-Natural probability thinking.
-Emotional resilience.
-Ability to act under maximum fear or greed.
->Trading is another form of probability theory.

Lessons from Eli Tullis

-Eli was excellent at sensing maximum fear and maximum greed.
-He waited patiently for emotional extremes.
-After a huge loss in cotton, Eli remained composed and confident.
-Lesson: when things get brutal, you cannot emotionally collapse.
-You must wear confidence and believe you can come back.

Daily process

-He plans around the US open and close.
-He reserves time before and after the close to map out the next day.
-He thinks ahead to Tokyo, Hong Kong, and London.
-He wakes during the night to watch London open and do analytical work.
-The rhythm is constant because macro is global.
-Communication as trading skill
-Journalism-style writing helped him as a macro trader.

Put the conclusion first.

-Identify who, what, where, when, why, and how.
Rank information by importance.
-Trading requires principal component analysis of many variables.
-The most important variable changes over time.
-The trader’s job is to know what matters most right now for a given instrument.

Macro framework

-Markets are interconnected capital flows.
-Trading means understanding global flows and positioning across asset classes.
-Central banks and governments often create the biggest dislocations.
-The best trades often arise when policy error meets positioning imbalance.
-You must constantly ask: what is actionable now?

AI and markets

-AI is an exogenous risk variable.
-He sees AI as a major tail risk because it is being built with a “build, break, iterate” model.
-That model works for ordinary technology, but not when the “break” could cause catastrophic social damage.
-He believes AI should be regulated.
-He specifically argues all AI-generated content should be watermarked.
-AI could cause major workforce disruption within a few years.
-From a risk-manager’s lens, AI is currently under-managed.

Passion and longevity

-Trading keeps his mind sharp.
-He sees trading as mental therapy.
-He wants to keep working because “you retire, you die.”
-He still trades because he loves markets, competition, and the ability to make money to give away.

Best distilled PTJ trading rules

-Ride big trends as long as possible.
-Protect liquidity above everything.
-Never trust an asset blindly.
-Be a risk manager first.
-Wait for extreme fear or extreme greed.
-Look for underowned, undervalued, complacent setups with catalysts.
-Policy errors create big trades.
-Valuation matters, especially for long-term equity returns.
-Have a plan before volatility arrives.
-Execute when others freeze.
-Focus on what matters most right now.
-Avoid information overload.
-Trading is probability, not certainty.

[Jake Wade @jakeawade]

If you want your life to be different, you have to be willing to do something different first.

[Michael (Hedge Fund Manager) @HedgeFundFomo]

Getting tired of these small clients

[Jake Wade @jakeawade]

@Mr_Derivatives I’m DCA in indexes

[Jake Wade @jakeawade]

@TheShortBear What % of your portfolio is in cash right now?

[Jake Wade @jakeawade]

@smizonx @TheRonnieVShow I get that on HIMS for sure. I felt UNH could weather ACA the best and had biggest moat.
I honestly didn’t do much DD on oscr so when it ran and I saw a bunch of the X accounts saying it’s going to $60 now that was my sell since I saw that same happen before

[Jake Wade @jakeawade]

@smizonx @TheRonnieVShow Nice 👍
I held $oscr from $13.xx and sold out at $21.xx last year.
Was my lowest conviction one and already had a pretty heavy healthcare position with Hims, NVo and UNH so took profits but might have to revisit now

[Jake Wade @jakeawade]

@BowTiedOx @CredCrisis What stroller do you recommend? Good for runs and walks

[Morgan Stanley @MorganStanley]

Watch Hard Lessons, as legendary investor Stan Druckenmiller sits down with Morgan Stanley’s Iliana Bouzali, sharing how he would construct a portfolio if he had to start over today, why contrarianism is overrated, and which stock he regrets selling too early.

[Peter Agboola @baba_Omoloro]

Anthropic has launched free courses to master AI with certificates for $0.00

https://t.co/hwJvuJHIdo

[Charlie Bilello @charliebilello]

NEW: Signal or Noise Ep 67

The Ultimate Guide to Volatility and Corrections

Video: https://t.co/Mc9NspX1s0

[Jake Wade @jakeawade]

@smizonx One of my favorite books all time! Read a few times will have to reread soon.
I just finished Best Loser Wins by Tom H. Was similar also a good one.

[Jake Wade @jakeawade]

@smizonx yep that's true, all my biggest winners have been in those same scenarios (google last year with anti trust and AI killing search) wow that's some DD, ok got it thanks for advice!

[Jake Wade @jakeawade]

@smizonx @ChrisCamillo That makes sense-I like that, less noise, Im realizing that's what draws me to chris strategy.Really hit what you said about digging deeper, I need to do that to hold for the big wins+not be shaken out by others opinions, or not holding onto large losers is why I asked. thanks!

[Jake Wade @jakeawade]

@OddStockTrader @grok biggest 5 space explorations tickers?

[Peter Mallouk @PeterMallouk]

There will be another drawdown in 2026.
Just like there was in every year before it.
But downside volatility isn’t the enemy of high returns – it’s the reason they exist.