Finance Trends Letter

Stanley Druckenmiller , a hedge fund Hall of Famer, speaks with Bloomberg TV at the Robin Hood Investment Conference and shares his thoughts on IBM and Amazon, technological innovation, his trading methods, and the current state of the hedge fund industry. A few notes and quotes from Stan Druckenmiller's latest interview (watch the full interview below): On IBM : Druckenmiller is short IBM. Sales have been declining since 2009. The cloud and Amazon's AWS is "killing" IBM. Says Druckenmiller, "I think the truth teller in companies is free cash flow and the free cash flow [declined considerably] since last year.". Amazon : Thinks Jeff Bezos is an incredible businessman who "creates monopolies". AWS is killing it and the market doesn't fully realize how important this area is for Amazon's revenues. Notes that his Amazon long is not as big a position as his IBM short.  Note : You'll find a bit more about Amazon's stock and th...

Trader, author, and Market Wizard, Victor Sperandeo joins us for an exclusive interview in our first Finance Trends podcast. To say we caught a lucky break with our first guest is a bit of an understatement.  Victor is a highly regarded veteran trader who has been involved with the markets since his first job as a Wall Street quote boy back in 1966. When he began his independent trading career in 1971, his primary goal was to make money consistently, month after month, year after year.  After 40+ years of consistent profitability, I'd say he's met that goal.  Over the course of his career, Vic has traded independently, managed hedge funds and CTAs (commodity trading advisors), and ran portfolios for George Soros and Leon Cooperman. He has also written three books on trading, including, Trader Vic: Methods of a Wall Street Master , a personal favorite which interlaced Vic's trading insights with sections on Austrian economics and personal psychology! In this rare,...

Some Presidents' Day reading and insights to guide us into the coming week. Recently popular posts on Finance Trends: 1. Trading psychologists: Overcoming your fear of pulling the trigger .  2. Global macro trading: Lessons from Market Wizard, Colm O'Shea . 3. Lessons from Market Wizard, Ray Dalio . - "Markets teach you that you have to be an independent thinker." 4. Lauren Templeton shares investing lessons from Sir John Templeton . Real wisdom on markets, behavioral finance, and life here. 5. Jim Rogers on Street Smarts and outsized investing returns . Rogers says the 4,200 percent returns he and Soros achieved at Quantum Fund are replicable, if you are passionate and work hard enough. Items of interest (markets, trading, and insights) from around the web : 1. Excellent Q+A with trader, Brian Shannon: Better Trading With Multiple Timeframes . 2. Joe Fahmy on The Greatest Trading Book Ever . 3. Napoleon Hill's Think and Grow Rich (e-boo...

In our first installment of "Lessons from Hedge Fund Market Wizards", we examine the lessons offered in Jack Schwager's interview with noted global macro trader and hedge fund manager, Colm O'Shea of COMAC Capital.  Last week we brought you a brief overview of Hedge Fund Market Wizards , including several interviews with author Jack Schwager sharing trading insights found within this new Market Wizards volume.  We'll expand on those ideas throughout this series by zeroing in on our favorite interviews and highlighting some key lessons and quotes. Of course, our notes are just a sample of what readers will find in these interview chapters - we don't want to give away the store!   Today, we'll look closely at some key insights offered in the book's opening chapter. Here are our notes on Schwager's interview with Colm O'Shea .  1) . Colm O'Shea began his career as a young economic forecaster. He was kept behind closed doors by hi...

"The worst thing you can do when you're having a hard time is flail. In trading, when there is nothing to do, the best thing to do is nothing." - Scott Bessent (Bessent Capital).  Well, the damage is already done for those who were heavily long heading into this week's market decline.  I look at the S&P 500 component data on freestockcharts.com and see that only 3 stocks in that index were up today. We saw a -4.78% decline in the S&P to go along with that. Here's an updated chart that shows the recent breakdown below the 1312 line we've fluctuated around in recent months. There's been a lot of whipsaw in this news driven market of late, and it doesn't seem like the recent deficit/debt ceiling deal reached by Congress has quieted things much. Even gold and silver got whacked today. But just look at all that money piling into Treasury bonds. At a time like this, perhaps it's best to step aside and watch the action from the sidelin...

During last week's MacroTwits discussion on StockTwits TV, Eric Jackson of Ironfire Capital posed a very worthwhile question to the group: who are the top global macro traders & investors of the day and what can we learn from them? For those who may not know, global macro is a term used to describe a largely "top-down" approach to speculating and investing across multiple asset classes and locales. Macro traders and hedge funds often take a big picture view of emerging trends and geopolitical events and express their positions accordingly by speculating in any number of markets, be they debt, futures, currencies, or international shares. The names of some now-legendary macro traders are probably familiar to most investors: George Soros, Jim Rogers , Stanley Druckenmiller , Louis Bacon, Paul Tudor Jones . But who are the rising stars and top practitioners of this investing style today? That's a question we're going to examine a bit further in the weeks ahead....

Slate's recent profile of writer/speculator, Vic Niederhoffer has been getting some attention from traders and finance types in recent days. I thought we'd take a look at it here too, to offer up some possible educational value from Vic's experiences with trading and loss. Here's an excerpt from Slate's profile of Victor Niederhoffer : " I've enjoyed getting your e-mails. It sounds like you've thought a lot about being wrong. Well, the reason you contacted me, to call a spade a spade, is that I'm sort of infamous for having made a big, notorious, terrible error not once but twice in my market career. Let's talk about those errors. The first was your investment in the Thai baht, which pretty much wiped you out when the Thai stock market crashed in 1997. I made so many errors there it's pathetic. I made one of my favorite errors: "The mouse with one hole is quickly cornered." That is key. There are certain decisions you make in li...

When James Altucher mentioned (on Twitter) that he was preparing an article about lessons learned while trading for Victor Niederhoffer, I knew that was one essay I'd be looking forward to. Here's James on, "Ten Things I Learned While Trading for Victor Niederhoffer" : " I traded for Victor Niederhoffer for about a year starting in 2003. I was up slightly more than 100% for him, primarily trading futures using a quantitative approach. During that period I had one down month: June 2003. Victor was a top trader for George Soros before starting his own fund in the ’90s and then writing the classic investment text “Education of a Speculator.” He then suffered one of several blowups in his career when his fund crashed to zero while on the wrong side of a couple of bets during the Asian currency crisis in 1997 (most notably, he was short S&P puts when the market crashed that year). Despite that, Victor has consistently traded his own portfolio quite successfully an...

When you look at the Bloomberg home page and see an image of George Soros sitting on a snow covered hill in a winter coat, you know that the Davos circus is in full swing. Soros talked to Bloomberg about the US' plans for a "bad bank" , which he says won't increase bank lending (but "will bring some relief"), and how the falling price of oil will affect the major oil-producing nations (Venezuela, Russia, and Iran) and their regimes. Soros also spoke about the British pound at Davos, saying that he had foreseen the fall in the UK's currency, but that he is no longer short the pound at these levels. Hedge fund manager Peter Thiel , who apparently is also at Davos, disagrees with Soros. He thinks the British pound will continue to decline this year, while the US dollar and the yen appreciate. Thiel seems to be echoing Jim Rogers' gloomy view on the currency and the UK as a whole, calling the country, "the worst country in the world at this point...