gdp's Comments

Mercenary Trader : On Getting What You Want

Wed, 8 Aug 2012 16:23:32 +0000

I think Seykota's observation is better taken as a food for thought exercise than a truism. But in respect to your question, I wonder if it's a trade-off: The pain of losing is deemed an acceptable sacrifice for whatever other motive is being fulfilled. Think of the biotech investor who consistently loses money on fly-by-night startups, but gets to bitch about his stocks on the golf course all the time, and occasionally brag about the ten-bagger he picked up on FDA approval. That whole experience, including the entertainment aspects, the conversation, the martyrdom, the glory, may all be worth the financial pain of consistently losing year after year. And so on.

Mercenary Trader : No Uninvestable Industries

Wed, 8 Aug 2012 16:19:53 +0000

True. But such goes back to price. Imagine if you could buy the textile business in a distressed asset fire sale, at such price as to make a 15-20% return on capital invested by selling off the machinery and inventory. Or imagine if you discovered that the business, while worthless, was actually worth purchasing as a hidden real estate play, or for a few hundred thousand acres of timberland sitting on the books. Broader point being, it generally pays to be curious, creative and inquisitive...

Mercenary Trader : View From the Turret: Ugly Macro, But How Much Already Priced In?

Mon, 16 Jul 2012 18:53:26 +0000

Time frames are key here, as they often are... we were more interested in bonds as a short-term swing trade idea than a longer-term trend trade idea for now.

Mercenary Trader : Meet the New Market Makers, Same as the Old Market Makers ('Dark Pools' Review)

Fri, 13 Jul 2012 12:32:19 +0000

I like Hofstadter's definition: Consciousness is "a hallucination hallucinated by a hallucination." Or the slightly more down-to-earth perspective of Jeff Hawkins: "Consciousness is what it feels like to have a neocortex."

Mercenary Trader : Gold Looks Terrible Part III: The Mass Capitulation Thesis

Mon, 9 Jul 2012 01:25:49 +0000

Similar thoughts, we're not really looking to short PMs at this juncture because the macro backdrop is just too squirrelly (better ideas out there)

Mercenary Trader : Gold Looks Terrible Part III: The Mass Capitulation Thesis

Mon, 9 Jul 2012 01:24:49 +0000

Agree - silver is gold on steroids: More hot money, more leverage to the global reflation case, and bigger potential downside as a result...

Mercenary Trader : The Series That Launched a Thousand Funds (HFMW Review)

Fri, 6 Jul 2012 13:11:03 +0000

Yeah... Jack in the Beanstalk is a second cousin, and Jack In the Box is a brother-in-law (though he's a bit of a black sheep, we don't talk about him)

Mercenary Trader : The Series That Launched a Thousand Funds (HFMW Review)

Fri, 6 Jul 2012 13:09:44 +0000

We are always evolving... but it's not so much a "more" emphasis on bottom up value investing, as adding that capability to the repertoire. Trading is the bread and butter and will produce the strongest risk-adjusted returns by a country mile. The advantage of adding post-crisis value investing to the mix, under very select circumstances, is a significant expansion in strategy capacity -- from, say, $100MM to $500M, $1B, or more -- and the capability of deploying conservative long-term funds in times of max opportunity. Also re, Claugus lifestyle, I can confirm - working from a home office (most of the time) is pretty cool. Been doing it for 7 years now :)

Mercenary Trader : In Defense of U.S. Treasuries (or, Debunking an Ideological Rant)

Wed, 27 Jun 2012 12:30:00 +0000

Thanks, will take a look - not sure I'd agree prices are "divine," but price action certainly deserves a lot more respect than it gets...

Mercenary Trader : In Defense of U.S. Treasuries (or, Debunking an Ideological Rant)

Wed, 27 Jun 2012 12:28:48 +0000

No position in USTs at moment -- high uncertainty and plausible scenarios for a next leg either way. Waiting for more clarity before getting involved again there.

Mercenary Trader : RTRA (Right Thought, Right Action)

Tue, 12 Jun 2012 23:27:00 +0000

Good question. We'll explore that in future posts...

Mercenary Trader : Gold vs Bonds: At What Point Should Gold Believers Lose Faith?

Tue, 5 Jun 2012 13:53:32 +0000

I'm guessing you saw the game changer piece...

Mercenary Trader : Gold vs Bonds: At What Point Should Gold Believers Lose Faith?

Thu, 31 May 2012 12:07:50 +0000

Yep

Mercenary Trader : Gold vs Bonds: At What Point Should Gold Believers Lose Faith?

Thu, 31 May 2012 12:07:30 +0000

Possible... though if such a scenario develops, our methodology is inherently flexible enough that we don't have to over anticipate it. If things play out that way we will simply just go with it.

Mercenary Trader : Gold vs Bonds: At What Point Should Gold Believers Lose Faith?

Tue, 29 May 2012 03:33:18 +0000

Thanks! We intend to keep raising our game...

Mercenary Trader : Gold vs Bonds: At What Point Should Gold Believers Lose Faith?

Tue, 29 May 2012 03:32:00 +0000

Indeed, the irony of "obvious" and much discussed outcomes is that, the greater the degree of discussion, anticipation, positioning etcetera, the greater the odds that adjustment is already "priced in." Barring that, widely accepted crisis forecasts can have an inverted self-fulfilling prophecy effect, where the observed seriousness of the situation leads to human action preventing it (Y2K doomsday scenarios the prime example). And then too, with bonds in particular, it is more likely that the $USD would "crash" than bonds (as the Federal Reserve can infinitely support the bond market, assuming their willingness to print an infinite amount of dollars).

Mercenary Trader : Gold vs Bonds: At What Point Should Gold Believers Lose Faith?

Tue, 29 May 2012 03:29:21 +0000

I'm not hammering it, a large portion of the financial community is hammering it... were one to draw a venn diagram of investors who believe "gold will skyrocket" and investors who believe "bonds will collapse," there would be a very meaningful overlap of the two.

Mercenary Trader : Gold Looks Terrible Part II: Clarifying Thoughts

Thu, 24 May 2012 00:58:00 +0000

We aren't short gold at the moment (though still riding bear silver trend); agree that many factors are lining up in gold's favor except "the big one" -- price action. GDX had an impressive day today (Wed 05-23) on that score. Also notable (though maybe not surprising) John Hathaway agrees with you: http://bit.ly/JEnVd6

Mercenary Trader : Attention Frustrated Chartists: It ain't HFT - it's the Macro!

Tue, 15 May 2012 16:28:00 +0000

The nice thing about markets is we can all wager as we see fit, and let P&L be the judge...

Mercenary Trader : Attention Frustrated Chartists: It ain't HFT - it's the Macro!

Sat, 12 May 2012 14:26:00 +0000

Uh, no. We don't have a "problem" as we have adjusted to this market environment without a problem. What was offered in the post was a diagnosis as to why markets are temporarily more confusing than normal, and why this condition is temporary, rather than the suggestion of a permanent sea change (which blaming HFT or the death of charts would otherwise imply). I started off replying to the other points in your comment, but then realized cleaning up the misconceptions and contradictions would take a mop and bucket, and so changed my mind. Good luck with gold and oil.