For indeed, the investor’s chief problem – and even his worst enemy – is likely to be himself.Benjamin Graham This is a rather spectacular story. It is 20 years old but it is as relevant today as it ever was for it sheds light on one of the key problems in investment speculation: human psychology. … Continue reading How Stan Druckenmiller missed market top by an hour and lost half his fund
During the 1970s inflation, M2 money supply growth never surpassed 14% per annum. This year we just blew past 23%. It is time to start paying attention!
This is not a hollow boast. While I-System has generated superb performance over the years, the key reason for this claim reflects a higher-order quality of the model: I-System has the potential to entirely transcend uncertainty and largely replace the human factor in asset management. To earn profits, investors must take and manage risk. In … Continue reading I-System: probably the best trend following model ever built
In spite of the obvious differences betewen the Soviet and U.S. economies there are disconcerting parallels between the systemic roots of their respective crises (USSR in 1980s and USA today).USSR's stalling GDP growth, growing 'defence' budget and balooning budget deficits ultimately led to currency debasement and high inflation. There's every likelihood that U.S. dollar will … Continue reading Inflation: lessons from last empire’s collapse
Last few years saw something of a gold rush into quantitative investment strategies. Their appeal is obvious as a way to put discipline into trading and take the emotion and stress out. Quantitative strategies might even help improve performance. Here’s how Black Rock President Rob Kapito articulated the industry hopes: “As people get the data … Continue reading Sack your quant!
In April I suggested that, between the bear market and bubble reflation, the latter was the more likely scenario. So far so good.Presently economic data is the worst we've seen in the living memory and stocks close to most overvalued ever. Now we have mass riots. Nonetheless stocks rise...As David Zervos recently said, looking at … Continue reading Will bulls or bears celebrate? Probably the bulls, right off the cliff…
In March 2019, I published an article looking at historical perspective on boom/bust cycles in SeekingAlpha. I suggested then that, “the (still) festering economic imbalances might get resolved along two alternative scenarios. Either we’ll have a full-blown deflationary depression that could see asset prices drop by 50% or more, or we’ll have a strong and … Continue reading Bear market or bubble reflation: what comes next?
Benjamin Graham and Warren Buffett achieved their stellar performance by not following their own value-picking advice.
While most market experts completely failed to predict this year’s  collapse in interest rates (see the chart below), we traded the event profitably. In this article I summarize the the hows and the whys of our performance with I-System strategies. How did we know to short US T-Notes starting in Q4 2017, then reverse … Continue reading How we knew yields would collapse?