Finance Trends Letter

Lessons on Being Wrong... and Profiting Anyway While revisiting the 1996 documentary Triumph of the Nerds this week, I came upon this fantastic segment on Apple co-founder, Steve Jobs. Finding it eminently quotable (and useful), I just had to share his thoughts from this special clip here. "I don't really care about being right. I just care about success." - Steve Jobs While Jobs was an entrepreneur in the emerging computer industry, and not an outright share investor or speculator, his quote about the relative unimportance of being right hit me right in the trader's gut. Here is a game changing company founder saying, "you know what... I don't need to have the best forecasts or even the most original insights and innovations (hence the looting of Xerox's PARC). I don't need to always be right. I just want to ship the best products and win. That is what will ultimately make Apple the most successful company in our industry....

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...

Our future may be a bit more fragile than "Anti-fragile", if the latest warnings from Nassim Taleb and Stanley Druckenmiller prove correct.  The pair recently sat down with Bloomberg TV to voice their concerns over America's social and economic strains. Taleb believes we are still loaded down with the unsafe systemic risks and toxic leaders of our recent past. Druckemiller sees a crisis "worse than 2008" ahead.  We have their full interviews for you here, so let's jump right in.    Nassim Taleb feels we are at a point where we have not learned or benefited from the mistakes of our recent financial crisis. This has made our society more susceptible to fragility and will deepen the effects of future crises. Moral hazard has increased as bankers have paid themselves larger bonuses with our (taxpayers') money. Quantitative easing has lifted asset prices. Median incomes, and the average person's standard of living, have been dropping while th...

"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....