Chris hosts an epic 2.5+ hour Macro Ops roundtable with Alex Barrow, Tyler Kling and Mr. B.
Mr. B gets a call sign update to Mr. Bean… though that did not go as well as he had hoped.
This is a monster podcast, unedited, long form.
We start off right away with Alex talking about this month's Macro Intelligence Report. He explains how a monster rally has left everyone in the rear-view mirror and now people are starting to FOMO into the market after a nearly 20% rally from the December 26th lows.
We dig into Alex's thinking at the end of 2018 of why the equity indexes had bottomed and what sentiment indicators he was looking at to feel confident. When everyone else was bearish it was interesting to see the reaction from fellow market participants after he posted a snippet of his report to Real Vision.
After this discussion we hit the following topics:
- Bottoms, what are some reliable, repeatable bottom-finding (not top-selling) setups
- Cash was the highest returning asset in 2018
- Value investing with Mr. B.
- Garrett Motion (NYSE:GTX) up 60% since the market lows
- Construction Partners (NASDAQ:ROAD) up 40% since the market lows
- Differences between retail investors and institutional managers, retail does not have to be stylistic
- Alex's long-term macro calls
- Rising interest rate regime
- Equity volatility
- 1960s and 1970s volatility
- Venezuela, on the doorsteps of war?
- Howard Marks latest note and anti-capitalism - You can find his note here
- Alex, a political scientist, goes into some depth on capitalism
- The craziness of 5:1 leverage to purchase a home… and a flashback to the 1990s at 16% interest rates for home mortgages
- Managing risk
- Highlights of being a full time systems trader and nomad
- Warren Buffett
After this barrage, Alex turns the tables on Chris and we learn a bit of his time before and during the military and where he got into systems trading. As a Marine he had visited Thailand and Indonesia during their debt crisis, and saw the effects of Russia defaulting on their currency as well as Pakistan and India getting nukes. He had a front row seat for some of the biggest events in global macro during the late 1990s.
Barrage number two includes
- Key requirements of a trading system
- Buffett and Munger discussion
- Humility, realizing that you suck but continuously learning from mistakes
- Getting comfortable being uncomfortable, truly analyzing what you are doing wrong and getting better over time
- Constant improvement
- Ice baths, extreme heat, building mental toughness and resolve
- Paper trading, backtesting, and getting experience
- Trading and professional athletics
- Systems position sizing
- Macro and value position sizing
- Catching the 3rd-7th innings and leave the 1st and 9th innings for the real heros
- Warren Buffett and Charlie Munger… again
- Tyler asks, would you switch places with Warren Buffett at 88 with all his wealth, or stay yourself? You know the answer.
- Finding edges where people aren't looking
- The edge of not having a "style" to approach the market. Your account does not care if you are a value investor, global macro, momentum or any other style of investor
- And we end with a biology break
Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.