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Tag: cryptocurrency

Investors Are Ignorant, Fade Their Conviction: Jason Shapiro (Szn 4, Ep. 30)

Published October 26, 2022

Jason Shapiro joins the podcast to discuss his trading strategy, based on the simple premise that most investors are wrong most of the time. This approach requires trades to be crowded, which is decidedly (and surprisingly) not the case right now — with two possible exceptions.

Content Highlights

  • Most traders lose money. Shapiro seeks to capture these losses by going against the crowd (3:11);
  • He does this by monitoring the Commitment of Traders report for extreme positioning, which he then fades (4:03);
  • The thinking behind this? The crowd is wrong. “It’s really that simple.” The discounting method is not price but positioning (6:11);
  • Shapiro monitors 37 different futures markets. Two examples of where this approach worked in the past (7:03);
  • Right now “I’m seeing some pretty scary stuff, because you don’t have anybody crowded” in major asset classes (8:24);
  • One possible exception: lumber (11:08);
  • Background on the guest (16:35);
  • Patience is a virtue, especially for contrarians (27:28);
  • “I have contrarian views on everything…that’s how I develop my opinion.” People are wrong because they want others to guide them (31:00);
  • The set-up in cryptos is “massively dangerous” based on positioning in Bitcoin futures. This sets Bitcoin and cryptos up for a major drop… (36:36).

(On this last point, Shapiro shared the following chart)

Chart of crowded crypto positioning

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There’s Still Time to Hedge Tail Risk — At Least for Stocks: Kris Sidial (Szn 4, Ep. 29)

Published October 19, 2022

Kris Sidial of The Ambrus Group joins the podcast to discuss tail-risk hedging: how it works, why it’s important, and how investors can still take advantage of volatility mispricings to protect themselves against further downside — at least in stocks.

Content Highlights

  • What is tail risk hedging? (3:19);
  • Traditional hedges haven’t worked, starting with the 60:40 approach. How might investors hedge stock and bond exposure? (6:15);
  • There are numerous options for investors to protect against downturns. But it’s not always as easy as buying put contracts on indexes (8:24);
  • Variance swaps, one way to compound returns on movements in volatility (10:25);
  • Thoughts on UK pensions and what might have caused issues in that segment of the market (15:27);
  • What investors are doing in this environment in terms of tail-risk hedging — there are still opportunities to hedge (20:02);
  • Background on the guest (30:08);
  • Discussion of systemic risk as a result of the layers of options trades and counterparties: “There is a systemic hazard taking place right now in the derivatives market” (39:32);
  • Speaking of risk, what about the regulatory environment? Are regulators asleep at the switch? Reasons to believe Dodd-Frank is perhaps not as effective as people think.. (43:37)
  • Thoughts on cryptocurrencies (50:01).

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Jordi Visser is Optimistic About Inflation, Stocks, Cryptos — And More (Szn 4, Ep 26)

Published September 28, 2022

Jordi Visser, president and chief investment officer at Weiss Multi-Strategy Advisers, joins the podcast to discuss his reasons for optimism during this trying time for global financial markets.

Content Highlights

  • The environment is constructive for risk assets (2:26);
  • Focus has moved from inflation. Investors are too negative (3:50);
  • The Fed is raising interest rates. Inflation is coming down — a lot faster than people think (4:41);
  • What sectors and why? (9:53);
  • No, you don’t need unemployment to increase for inflation to come down (13:22);
  • The bullish case for biotech (15:12);
  • The blockchain will have profound impact on labor markets (19:42);
  • Background on the guest (25:13);
  • Clean energy and how that fits in (29:14);
  • Oil should move higher, but watch out for global trade (36:47);
  • Web 3.0 and cryptocurrencies: here too there are reasons to be bullish (39:48);
  • Beta has started to outperform profitability. A final reason to be optimistic (51:45).

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