TLC Weekly Update September 17, 2021

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Today is quarterly expiration for index options, index futures and index future options. More and more retail traders are engaging in option trading activities. That in turn forced the market makers to create larger and larger hedged positions that has to be unwind by option expiration. The exaggerated price swings are expected. There is really no need for the MSM trying so hard to explain everything …

ZH has an interesting article about covid situation in Sweden. Not that I am a conspiracy theorist but how can we not thinking about this whole mandatory vaccination and vaccine passport mess worldwide being a evil plan or some sort?

Here is an educational video about sex that feels so awkward due to the fear of offending some people. Science is now being robbed of its function and identity in this messed up world …

For those of you who find it hard to engage in difficult conversations, this video from Tim Ferriss is a nice framework to learn from.

I have been very busy all week and I told my friends that I wish there are 28 hours a day. So many things I am trying to get done yet something always comes up that has to be taken care of first. Let’s see if this troubling trend will end next week.

Have a great weekend all!

TLC Weekly Update September 10, 2021

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Rollover week for index futures this week. So far this week volatility picked up a bit but every attempt to move lower are forced back up fiercely. All overnight selloffs are erased so that normal people can’t tell that they ever happened as it does not show in their portfolio. Now that today the markets finally have a weak weekly close, what do you think Powell will do this weekend?

CGP Grey has done another crazy project again. Enjoy the fruit of his work here. This is how research on historical records really looks like.

I found this series of videos the best summary of Charles Mungers life long wisdom. No matter you invest or not, his “techniques” for handling life and everything else is the best self-help advices you can get. It can be easy to just listen to the series and forget about it right after. So I recommend watch it, reflect on each individual mental model and learn to incorporate that into your own decision making process.

Here is a less technical video about virus which addresses a fundamental concept, are they alive? When we discuss about the covid situation, everyone has an opinion but normal people most likely have a completely wrong mental picture about virus. In fact there is no unified understanding of what they are at all because we still know very little about them. Science is still very lacking on this frontier …

Thus I can’t understand why talking about common sense like personal hygiene, exercise, healthy diet and exposure to sun (or direct Vitamin D intake) as first line of defense against covid are banned on YouTube and various mainstream media. I have received many links from others quoting “factcheck dot org” on related materials that they are all “false”. Unluckily, everything I read so far from that site are written in evasive language to misguide people.

Who is going to fact check the fact checker, eh?

As usual, I will focus on my work and hopefully getting more things done. When the world has fallen into chaos, shutout the noises and keep oneself busy really help.

Have a great weekend all!

A Non-Conventional Approach to Investing by Following the Long Term Cycles of CEOs and Hedge Fund Managers

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The financial industry is full of idiotic ideas on how to pick the right stocks using all kinds of so-called scientific approaches like fundamental analysis and technical analysis. Lately, they even added physicists and other hard science PhDs to find new ways to profit from the markets. Based on my 30+ years of trading experience, however, none of these stuff works consistently. They don’t work well because markets really move due to aggregated human beliefs, not because of some voodoo earning multiples that someone from the past telling you that 8 is normal and 20 is too high.

So what has Wall Street missed in finding a way to beat the markets?

Well, they failed to utilize the most esoteric analysis tool of all – astrology.

I am not talking about Western astrology here. I am talking about classic Chinese astrology that has a full fledge system in determining a person’s luck cycles with money, fame and career. Instead of looking at a company’s birth chart like many Western astrologers assumed to be of any significance, why not look at the person who has most to lose on the rise and fall of a company’s stock price?

Yep, I just said it. All you need to do to see if a stock is going higher is to find a company founder or just anyone whose wealth is more than 50% tied to a stock. If that person is entering a lucky cycle with money and wealth, the stock price would go higher, if this postulate really works.

We can even extend this concept to look at the famous hedge fund managers to see if they are in their lucky cycle or not. If they are lucky, lean on their bets. If they are unlucky, bet against them, or at least be very careful if you agree with them.

So I finally say it out loud publicly that astrology may have useful applications after all, aside from being a party trick or entertainment among friends.

If this approach really works, the implication is far more interesting than just discovering yet another market timing tool. Think deeply on how Western culture likes to worship all these big company founders and famous market gurus. Public regards whatever these people say about their philosophy in running businesses and in investing as some kind of wisdom to learn from. But in reality, if my conjecture is correct, they were probably in their lucky cycle that manifested into fame and fortune. Once their luck is gone, whatever they say no longer has that magic quality …

This also creates another issue often misused by casual astrologers. Many people who believe in astrology often go one step too far assuming they can find all the reasons of success from the exact birth time of a famous person. That is so wrong. For even the most famous billionaire of our time, at the moment, Bill Gates, has other people who were born at the same time he was, in the same city and did not fare as well as Mr. Gates does financially.

In short, we maybe able to use astrology to identify important decision time and the luck cycles but the rest is all about personal choices and the environment influence. Accept the limitation of astrology will help one use it correct.

Here comes the challenge: who should I choose to experiment with and see if the Chinese astrology system really works?

Tell me who you want to be studied first.

I will work out the specifics and post it here.

Let the experiment begins!

TLC Weekly Update August 13, 2021

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Today is Friday the 13th. Another record setting day for the stock markets worldwide. According to multiple sources, retail players are now going all-in. If that is really the case, then this rally will last at least until majority of these retail investors used up all their bullets first. I wonder when that will be.

Read a report of robbery … and it makes me wonder how low USA has sunk. I am not sure if going to USA will be a good idea for any tourist in the future.

I am thinking and preparing my trading firm’s disaster strategies. I have learnt more about the Carrington Event and it is enough to keep me waking up at night. Seriously, even NASA can only warn us just hours before the impact of these solar coronal mass ejections on Earth. Unlike more than hundred years ago, our cities and pretty much everything depends on the functioning of our electricity grids and, well, the internet. I wonder how prepared we are against this type of disaster.

The talk of the Great Resignation has been popping up everywhere. It is a phenomenon that we should not ignore. The crazy covid responses worldwide by the governments produced this movement, intentional or not doesn’t matter. What matters is that going forward the societies as we know will change drastically due to this change in attitude among many people.

And if you have the time, enjoy this lecture about a mystery period in human history. It was done back in 2016. And I think it is so relevant today that we should be aware of the possibility that, unlike what those New Age dreamers saying everyone is going into spiritual enlightenment now, the coming decades could be the world burning down to ashes with majority of human going insane first.

For those of you interested in stargazing, a spectacular light show is happening these few days. If you get the chance to observe the sky in a rural area with less artificial light, you will love what you see.

This weekend I have tons of chores piled up that has to be taken care of. It happens when I am so focus on my research work from time to time. Time to clean the clutter!

If you have email me over the past few weeks and I haven’t responded yet, just send it to me again.

Wish you all a great weekend!

TLC Weekly Update July 23, 2021

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Another all time high for the stock markets this week. What a stunning performance this week from down 2% to printing triple all time high records today. The big question remains – how long can it last?

My take as a day trader is to deal with it one day at a time. There is no point guessing when the markets will stop going higher or lower. Here is a good point made by Jeff Gundlach.

Hikaru took the challenge to play 5 miuntes to 1 minute odds games. When you look at his games with the other GMs in the world it is hard to realize how good a super GM really is. But then when he plays against normal people …

Read this piece from YouTube and confirmed the story myself. I am speechless of what Ontario is going to do to math and hard sciences in schools. I guess no opportunity is wasted when it comes to spreading this disease to the younger generations.

More work to be done for my projects. Good news is that I managed to complete tons of stuff this week. The bad news is that I hurt my right wrist badly due to extreme long hours of typing. My hand will get a break this weekend from typing. I guess I will focus on reading instead.

Have a great weekend all!

TLC Weekly Update June 18, 2021

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Quarterly option expiration Friday today and as expected with the stock market indices pinned lower. Nothing special yet the media continues to make up reasons for something that happens regularly. Is it that hard to figure out the third Friday of a quarter end? I am not trying to be mean here … could it be the case that many financial news reporters are having dyscalculia.

Those crypto fans with many followers have been very bullish about bitcoin for like a week now. They even come up with all kinds of charts with squiggly lines to show that Bitcoin has already “bottomed” and that it will go to $100,000 “very soon”. Well, I stand by my prediction made back in April through Twitter and here is the latest update of the chart that I added a few lines (once in mid-May and then Jun 1) to show how easy it is to read a chart like bitcoin due to its participants are mostly emotional beings.

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How do I know Bitcoin will go sideway for a month? It is simply basic chart reading. I even wrote a book on chart reading years ago showing how to do it. And here is rule #1 : read the chart from left to right only. Why? So that you cannot add opinions of your own after the fact.

Of course I can be wrong since charts only tell at most 60% of the story. For the well being of the crypto HODL crowd, I wish them luck and that I am wrong because the projected down move is not the end of the drop. I just do not want to give them a heart attack.

Here is a nice video on a pretty bird nesting. Something feel good is called for as the re-opening of the world is happening.

Patrick Boyle has not disappointed and came up with yet another very good video about the current state of the stock markets. What he said is something I know for a long time from my investing in various companies these years. Majority of them chose not to go public because of funding availability in private sector. When you are a profitable business and have all the funding you need to grow, what’s the point of going for IPO. Watch it if you want to understand the subject better.

To round up my clips, here is Paul Tudor Jones talking about the inflation trade (well, we can’t rule out the fact that he maybe touting his positions). I like to add just one minor but deadly point about this view of Fed failing to contain the inflation or that hyperinflation is coming. All it takes the G7 governments to do is manufacturing another “crisis” like alien invasion or a really deadly pandemic to allow for forever printing of money, at least within their sphere of control. In other words, with a very violent transformation from so-called democracy, which is never really the case anyway, into authoritarian states and viola, you can forget about inflation for good …

This week has been a very productive week that I managed to get many things done in a short period of time. Hope that I can keep this up and ready for the deadline (end of June) I imposed on myself to be ready for the soft launch of my proprietary trading. Exciting time!

Happy Father’s Day!

TLC Weekly Update June 4, 2021

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Non-Farm Payroll report today helps sending the stock market higher so far this morning. Looks like we are back to the bad data is good for the stock market regime. How long would it last though given so much money has been pumped into the system yet we are not seeing what the politicians promised …

I found this pair of videos very amusing. First, an attempt to make an unpickable lock. And then how this lock was picked. The way these two guys interact may lead to some real improvements in making locks, finally.

Lately I find an explosion of horoscope videos on YouTube. Many are jumping onto this new era of superstition to see if they can make a career out of it. Well, being an astrologer is not for everyone. Circular argument, ignorance of obvious common sense and choose to creatively interpret the astrology classics would not turn one into an expert of astrology overnight.

I found this video a great snapshot of at least a part of the crypto crowd’s mentality. The theme is really nothing new. Going all-in for instant gratification and when things not going their way just lie to themselves that they are in this for the long term.

I am not against playing with cryptos. I made very decent profit from it myself and have no complain. What I like to point out is that new technology of every generation always led to extreme speculations and crashes. Right now we are going through the process of elimination of those things that should not exist in the first place. Think for a moment, how many of those 9000+ coins are really worth anything at all?

This process usually takes several years to complete. I will take the sign that when these 9000+ coins are reduced down to like fewer than 300, the crypto space will be ready for its next phase.

I was asked a very interesting question the other day about automated strategy generation. My take is very simple, the current quant approach to strategy development, including AI based and genetic programming, will only yield models that are bounded by their framework. As long as the framework they use stays the same, which is serial data analysis, they will not be able to discover anything useful or consistent over time. I collect these platforms since the 1990s and never stop testing out these stuff. Nothing impress me at all so far …

This month I have to focus on polishing our prop trading models. I work best alone when serious research work is required. It feels great to get things done this way.

Have a good weekend all!

TLC Weekly Update May 28, 2021

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Today is last trading day for the month of May, It is also the lowest volume week so far for the year. I don’t know what the implication is. Maybe just that the weather is getting so nice that people prefer to go outside to get some fresh air instead of staring at their screens all day.

Next Monday is Memorial Day, a US holiday. As a Canadian, I rarely have a break on Canadian holidays if US markets are open. My holiday schedule actually follows the US ones. So next Monday I will be able to carry out some long overdue chores finally.

This is a very good video on Robinhood IPO Access. Mr. Boyle goes in-depth explaining how IPO works and the historical statistics on IPOs. I could not have done it better myself. So if you want to understand IPOs better, or that you want to invest in IPOs, watch the entire video.

Another process disrupted by internet connectivity – startup funding, has led to some interesting change in the makeup of startup investors. I am not sure what will happen to startup funding with a down trend in economy that almost everyone is expecting that to happen “soon”. The enabling of young people to easily invest into startups is a double-edged sword. Young people often lacks the knowledge and life experience to make smart investment decisions. On the other hand, they have time on their side. With just one good bet on a startup, it can be life changing for them in the future.

For this Memorial Day long weekend, enjoy this video of scotch and puzzle. I like watching this youtube channel during my lunch hour because the videos are pretty short and can distract my mind from my work. A form of ASMR maybe?

For those of you who are into astrology, tomorrow is the start of Mercury retrograde until June 22. I assume astrology fans already know about its general implications. But there is one unique feature of the pattern that people rarely talks about. the 10 days around the start of the retrograde is also a time of inspiration for those who conduct research and deep learning. So take your time to reflect and dive deep in coming few days can help you discover new understanding in things you are stuck at.

I just completed a round of hardware upgrade on my servers to make sure they are battle ready for my prop trading launch. Now that the hardware are mostly ready, I will go back to fine tune the software side. So much work, and as usual, so little time.

Have a great long weekend all!

TLC Weekly Update May 21, 2021

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Option expiration Friday today. To the surprise of the new crop of retail traders, the stock market did not go straight up off the open. What they have mistaken as a sign of the stock market bottoming out this week is in reality the normal option expiration dynamics at work. Option market makers can’t just sit there watching their books get toasted by close today, can they?

Hence they do their best to defend the markets from dropping lower on Wednesday to protect the puts they wrote and now on Friday they do their best to put a cap on the rally to protect the calls they wrote. It is really business as usual but the media always put a spin on this.

I was working on upgrading our network infrastructure and somehow when I search for network routing this completely unrelated article came up. It talks about how easy it is to do something extremely malicious to others that police will have a hard time catching the perpetrator. Cyber crime is real and can happen to all of us.

Watched a long discussion between Jordan Peterson and Stephen Fry. Very interesting talk as one of them is a religious person and the other is a declared atheist. It is a great conversation demonstrating how people can conduct meaningful conversation even though the standpoints are not the same.

For those of you interested in financial market outlook, Jeff Gundlach uploaded a video of him presenting his view at a Tony Robbins event. It is a nice summary of his view and what he believes will happen soon. His recommendations for the young guy is priceless.

This weekend will be another brutal week for me to take care of the details before the launch of my proprietary trading venture. It is just over a month away. So much more to get done and I wish I have 40 hours a day.

Have a great weekend all!

For my fellow Canadians, Happy Victoria Day!

TLC Weekly Update May 14, 2021

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The sell in May pattern returned this year after many years of hiatus. But then traders who started trading over the past few years would take this as a something that has no place in this new era of Fed printing until it can’t. So, we got a wonder rally today taking the stock market back up to about half of the drop made earlier in the week. At this point, the stock market is not closed yet so I can’t tell which side has won the week.

Nassim Taleb came out with a new video trashing Bill Gates. Not mentioned in the video is that Gates Foundation has been doing the same in many other places for a long time. So the damage is likely done already. I would go as far as contemplating that all the so-called climate change, virus outbreak, alien invasion are all his faults …

World chess champion Magnus Carlsen did it again – he can simply look at a chess board and recall what game it was, including the players involved and in which event. Normal humans can only analyze a board to try to find out the next best move, let alone remember the exact game right after. There is a reason why he is still the world champion today.

For those of you interested in intermittent fasting (IF), check out this video by Dr. Fung. The more clarity you have, the better you will be able to stick to your plan to utilize IF as a tool to keep yourself health. My warning though is not to jump into the more difficult fast until you are comfortable with handling your hungry first. It takes time to train your body to not signal you to eat even though you do not need food yet.

This week I will need to take care of chores that I have no time to deal with over the past few weeks. Will probably grind through them at a slower pace. So much has been done this month yet I still feel like I am behind schedule.

Have a great weekend all!