BC TRADING
Saved by @CodyyyGardner

1) As the miserable year of 2020 reaches its end, it's time to return to the offices of Hindsight Capital LLC.

For those unfamiliar, this great, albeit imaginary, hedge fund invests with the benefit of a style guaranteed to beat all others: hindsight

 2) As such perfect vision would allow infinite returns, certain limits are imposed on Hindsight Capital’s managers:

🚫It can't trade during the year
🚫It can't use leverage
🚫It can't invest in individual stocks
✅It must make broader or sectoral bets
https://t.co/GAAuDinYSV
3) Hindsight can, however, make “long-short” trades.

But the hedge fund must be able to explain how someone might have made such a trade based on only what they knew at the time. Foreknowledge of earthquakes and hurricanes, for instance, is not allowed https://t.co/GAAuDinYSV
4) As for the pandemic, Hindsight Capital’s managers were aware of the novel coronavirus in Wuhan and had little difficulty in predicting how the world would react and what its effects would be.

That was crucial, as will be seen in this thread https://t.co/GAAuDinYSV
5) Hindsight Capital always bases itself in the country with the year’s weakest currency.

In 2020, that was Brazil, giving its managers a great excuse to live out the pandemic from an office overlooking Ipanema Beach https://t.co/GAAuDinYSV
6) Whenever the world hits a rough patch, it’s a safe bet that Latin American assets will be grievously affected.

Brazil made its position worse with President Jair Bolsonaro’s handling of Covid-19 https://t.co/GAAuDinYSV
7) Whatever the investment, a weak currency transforms it (a phenomenon known as money illusion): hot “FAANG” stocks (Facebook, Amazon, Apple, Netflix and Alphabet) gained:

🇧🇷160% in Brazilian reais
🇸🇪Only 76% in Swedish kroner, 2020’s strongest currency https://t.co/GAAuDinYSV
8) The coming pandemic would mean lower demand for oil.

Normally, lower oil prices would hurt alternative energy, but 2020 saw breakthroughs in solar power technology. It was a spectacular success.

Putting the trades together made 431% https://t.co/GAAuDinYSV
9) The pandemic would also freeze travel, so Hindsight bet against hotels, resorts and cruise lines.

As for beneficiaries: Companies that make it easier for us to work from home.

📈FAANGs: 100%
📉Hotels: Fell 28%

Hindsight made 178% on the trade https://t.co/GAAuDinYSV
10) With people stuck indoors, the moment for a final coup de grace to the traditional retailing model had arrived.

Hindsight bet against real estate investment trusts investing in regional malls. Amazon had guaranteed profits.

The trade made 198% https://t.co/GAAuDinYSV
11) The pandemic spurred many people to try to leave cities.

So, Hindsight bought futures in lumber, where the housing boom would show up first. Meanwhile, life was very difficult for mortgage REITs.

Put them together, and the trade made 213% https://t.co/GAAuDinYSV
12) The pandemic also meant that there would be cash aplenty.

What could be better than crypto? Bitcoin gets a lot of attention, but Ethereum was an even more exciting prospect. Buying Ethereum made:

🇺🇸464% in dollars
🇧🇷631% in reais
🇸🇪394% in kroner https://t.co/GAAuDinYSV
13) China was rocked early by the pandemic, so it was a safe bet that it would press the accelerator again.

Hindsight bet against crude and went long iron ore. The trade tripled the fund's money in late March; by year’s end it had made a profit of 136% https://t.co/GAAuDinYSV
14) In 2020, the story was about the victory of Asia — and its successful management of the pandemic — and the defeat of Latin America, which was already deeply troubled before it succumbed to Covid-19.

Putting the trades together made 70% https://t.co/GAAuDinYSV
15) At the start of 2020, it seemed unlikely that Biden would have a shot at winning the White House.

But Hindsight saw that Democrats were desperate to beat Trump above all else. Biden gave them the best shot do that. Betting on him yielded a 315% return https://t.co/GAAuDinYSV
16) Only a few assumptions were needed to make Hindsight’s trades:

💸The pandemic would affect the economy
🌎The West would deal with it far worse than Asia
💱The main response would be cheap money

Maybe these trades didn't need much hindsight after all https://t.co/GAAuDinYSV
17) As for next year, it is noticeable that a number of these trades have turned down since Pfizer announced its vaccine test results.

Will this continue into 2021? Alas, Hindsight Capital wouldn’t tell me, nor would it disclose its trades for next year https://t.co/GAAuDinYSV
What did #HindsightCapital miss? All suggested trades welcome. (Remember: no individual stocks, no leverage, no trading during the year). #Happy2020.

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So..had a great conversation last night with older investment types, old friends whom I traded with/against and managed money against or for. Age diff from me is > 10+ years so the takes were interesting but the common theme was a little disturbing (depends on your view)

Was looking at the landscape of the world & quite concerned where we are (I do not share your optimism for a shinny happy future). I am a Bond guy + Cycles & my view approach is ALWAYS what is the worst that can happen (that is how I was taught to trade & manage money) As a Bond

Money manager you never every want to apologize for a negative year, most people don't understand bonds can lose lots and lots and lots of money. So my view on life is always negative & fuck you approach.

The others are similar but have more equity exposure and FX, one other is really good via commodities so the conversation was from a top down look with some bottom up approaches. So.....after looking at the notes of the great conversation this is how it looked:

basically the world changed 2007/2008 especially North America. The GFC set in motion financial engineering games and here we are. The issues pre this (2000 to 2007) set ALL this up so lots of blame to go around but to pin point certain things the real problems started with QE &
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FINDING EDGE IN OPTIONS

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I soon realised that theta decay with sound adjustments is not an edge, which i earlier thought was & which gave me good returns over the years. After that i went deeper in understanding volatility behaviour, how/where it manifests & all the discrepancies in option chain. (2/n)

With finding edge in logistics i mean how to keep the greeks in check, SL in place & optimum ways of adjustments with minimum slippages. So the main aim here is to write theta without following vol behaviour & having any actual knowledge of what's going on in the markets. (3/n)

A dedicated trader can learn all this in few years & it is something which is 'obvious' to become successful. But majority can't reach this level, as this also requires consistent hustle in live markets. All the seminar/webinar business teaches you till this level only.(4/n)

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@therobotjames
In my 20 years of trading I have noticed this cycle play out again and again with traders that "make it":

1. Overconfidently reach for returns
2. Get humbled by the market
3. Simplify + concentrate on clear, high probability edges.

1/n

Nearly everyone starts with a lack of respect for how hard it is to consistently make money trading.

That leads them to pass over high-probability sources of returns in favor of more marginal ideas.

Or they overcomplicate the trading of a good edge.

2/n

Here's an example...

It is 2015. You look at a simple strategy.

You hold an equal dollar exposure to:
- Cap Weighted US Stocks (VTI)
- 20+ Yr US Treasury Bonds (TLT)
- Gold (GLD)

And rebalance each month.

(I've extended back a bit with mutual fund prices.)

3/n


It made money consistently with a few blips.

You'd have 4x your money from 1997 to 2015.

It makes sense. It's harnessing two big sources of risk premia (equity + duration).

It diversifies across 3 macro assets that tend to outperform in different econ environments

4/n

But, naturally, you turn your mind to how you could do better...

And here is where it gets dangerous!

There are good ways to try to "do better", and there are bad ways to try to "do better".

5/n
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Aditya Todmal
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@AdityaTodmal
TradingView isn't just charts

It's much more powerful than you think

9 things TradingView can do, you'll wish you knew yesterday: 🧵

Collaborated with @niki_poojary

1/ Free Multi Timeframe Analysis

Step 1. Download Vivaldi Browser

Step 2. Login to trading view

Step 3. Open bank nifty chart in 4 separate windows

Step 4. Click on the first tab and shift + click by mouse on the last tab.

Step 5. Select "Tile all 4 tabs"


What happens is you get 4 charts joint on one screen.

Refer to the attached picture.

The best part about this is this is absolutely free to do.

Also, do note:

I do not have the paid version of trading view.


2/ Free Multiple Watchlists

Go through this informative thread where @sarosijghosh teaches you how to create multiple free watchlists in the free


3/ Free Segregation into different headers/sectors

You can create multiple sections sector-wise for free.

1. Long tap on any index/stock and click on "Add section above."
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Kinda like how I did in the picture below.
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Investment Books
Investment Books
@InvestmentBook1
Knowledge sharing initiative Book 4: "The interpretation of financial statements" by Benjamin Graham.

This book was published around 1937 by investing legend Ben Graham. Ben is also regarded as the guy under whom the great Warren Buffett started his investing journey.


This book teaches financial statement analysis in a very simple manner. It also focuses on the key relationship between P&L, B/s & Cash flow statements of a company.

Here are key takeaways from the book 👇👇

1.B/s shows how much a company owns (assets) & owes (liabilities) at a particular point in time mostly prepared on a semi-annual & annual basis.

2.Assets=Tangible (PP&E, inventories, accounts receivable, cash)+intangible Assets (trademark, lease rights, goodwill)

3.Liabilities=Short term debt (accounts payable,current portion of long term debt,advances from customers) + Long term Debt (bank loans,bonds,lease liability)
4.Tangible assets are written down through depreciation & intangibles are written down through amortization or impairment

5. Depreciation & amortization means normal wearing out assets over its typical lifespan. It allows the cost of the asset to be charged off (in the income statement) over a number of years.

6. Depletion gets applied in commodity businesses like cement, mining, and crude oil.
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