Trading Market Turmoil: Any System is Better than No System | OPM Trader Talks with Petr Pinkhasov of Anthem Capital Management
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They're not signals. It's like you're seeing the market in color. Like if you're just looking at regular prices, you're looking at black and white. And then if you look at the mark, you're seeing things in color. It doesn't sound very sophisticated, but you don't need to be very sophisticated. You know, any system is better than no system. And just using blind judgment or vibes is it's coin flipping.

Today's episode is brought to you by Fintool, the AI junior analyst tailored for institutional investors. Go to the Fintool.com link in the description to learn how you can add AI to your research process. Before we get started, I want to do a quick disclaimer that nothing we say here is investment advice. As well, nothing we say is marketing or advertising for Anthem Capital Management or any of their funds. Everything we discuss here is meant to be informative about the fund management industry.

Welcome to this special Trader Talks edition of Other People's Money. I am joined today by Peter Pinkasov, the CIO and co-founder of Anthem Capital Management.

Most of the time on the show, I'm talking about the business side of investing. But today, we're going to talk a little bit more about trading, a little bit more about markets. And Peter is somebody I've known for a while, and I couldn't think of a better person to come on and help the listeners of OPM try and navigate everything that is going on as we close out Q1 here in 2025. Peter, thank you so much for joining me. Thank you for having me. Yeah, it's good to hang out again. We've known each other for a little while now. So yeah.

Good to do something a little bit more formal again. I know, right? Well, we worked together back at Real Vision. Every once in a while, people would join the team, whether they were on editorial or whatever, and you'd go look up the bio and you had like a real trading background. So I was very excited to have you because we always had a mix of people, whether they came from finance or media or whatever.

And anytime I could pick the brain of somebody who had actually sat in a risk seat before, it was a lot of fun for me. So I was very grateful to have worked with you there and excited to do this now. So you've recently launched Anthem. We can get that out of the way and we can get into some of the stuff that's a little bit more timely. So you've launched Anthem. Can you tell me a little bit about how the launch is going and what type of strategy you run?

Yeah, sure. We started the seed strategy about a year and a half ago, and we did pretty well there. My partner was also my first employer as well. When I left law school, because I just hated law school, I really wasn't into it back then, in 2013, I went to go join an RIA.

My partner, David, he kind of hired me because he saw that I had like a, I was still, I was trading my own money back then. I was like a broke kind of,

law school dropout and uh he saw that there was something there and he kind of took a chance on me and hired me uh to go join an ria back then uh long story short we kind of we we did okay together and we stayed friends and i transitioned off to do different uh trading roles or portfolio management roles or whatever currency trading roles and uh you know i kind of reached out to him uh

asking, hey, I kind of feel like I want to get some money going. Let's get a bankroll going. Let's get some investors here. I just want to do some managed accounts. And he kind of introduced me to a few people and we did pretty well for them. And that was basically the Steve's strategy for Anthem about a year and a half ago. Our official launch date was May 2024. So we're coming up on almost a year now.

of a live track record. And yeah, it's the markets have been pretty exciting. And as a trader, it's it's definitely volatile. Things are transitioning and changing very quickly.

But it's an exciting time to be a trader, basically. You can correct me on where I'm wrong here. I'm sure I will be. But when I think about you, I think about you as like a trader's trader. Like when people sort of imagine not a day trader, but like somebody who takes a sort of multi-week of you on whatever asset is moving. Like if that is where the action is, like Peter is going to be there.

I actually, I think that's a pretty good characterization. Yeah, I, you know, my philosophy for markets, I think, has evolved over the years. Now it's more of a, how you would describe it, I think, you know, in the last 10 years or so, it's definitely gone away from being really technical, short-term oriented into something more

more of, Hey, take a view and then use the skill sets that you learned from, you know, technicals and microstructure to, to help execute. But you got to use your head and, uh, formulate a view. And then when the facts change, then, then you, you know, then you can change, um, that view, but, and then you always got to manage your risk accordingly the entire time. Think about path dependence, all that good stuff. But yeah, I mean, um, think,

take a view um sometimes yeah if things are moving really really quickly uh you know day trading i think is fine when things are volatile um but yeah i think that sweet spot is definitely you know we've what i'm really looking for is a divergence between price and narratives

And if something is priced that's not really reflected in objective reality or the market has something wrong and I have a chance to take a view on that, that one or two week time frame is kind of a sweet spot for that sort of thing. Especially in stuff like interest rates. That's been the golden pony for trades like that over the last year or so. Okay, now...

I got to ask, like, do technicals work? Because if you are following technical analysts, they'll tell you like, yeah, it's the only thing that matters. And then there's an entire group of people who are like, it's all it's the male equivalent of astrology. So which is it?

It's definitely the male equivalent of astrology, but that doesn't mean that it doesn't work because I you know me and maybe some of the listeners might have followed me before on Twitter. So I don't have like a big following, but maybe one or two of and they might know that I'm a big fan of the DeMarc indicators.

That's definitely astrology for me. Do I use it for execution purposes? Sure. Does it work more times than doesn't? Sure. Would I, if I could go back to my earlier, more formative years and unlearn a lot of things about technicals? Yeah, I think I would. But having said that, knowing that,

Knowing how prices should move and having a game plan and all that stuff. You can only learn that stuff if you're a technician, really. There's pros and cons to looking at

markets in such a binary way where you think price is all that matters. The pros is you become supremely disciplined on the risk management side. The cons are obviously you're like reading tea leaves and ignoring like so many of the inputs. Yeah. Yeah. So it's, you know, we all we all learn things and maybe I still don't know if this is absolutely true, but I'm sure it's a combination of both, you know.

Um, you got, but you know, technically when I think of technicals, I think of just really rudimentary sort of support. Was it like even, even back then, like descending triangle patterns, like all that stuff. I still, I never even fall or like Elliot wave. Like why does the market have to move on a one, two, three, four, five cycle or ABC waves? Like I never understood.

But DeMarc, though, this is where I get I'm lost on it. You're like, Elliott Wave, that's nonsense. But DeMarc, you're like, now that, there's some truth to it. So are you looking at it purely as a statistician? There does need to be statistical strength in the DeMarc indicator and in your looking back at these other indicators, that relationship isn't there. Yes, there is some statistical significance on the DeMarc side.

It's not great. Like it's, and I always described that, uh, it wasn't me who would describe it, but I, I forgot who said it. Um,

I think it was like one of the guys from Omega actually. But anyway, they said when I use the DeMarc indicators, they're not signals. It's like you're seeing the market in color. Like if you're just looking at regular prices, you're looking at black and white. And then if you look at DeMarc, you're seeing things in color. And that's because the DeMarc stuff, all it does is overlays sequence counts on top of

you know, prices. So you know, oh, this is like the 13th time that we've closed above or below the price from two bars prior. And usually when you get to the stage where that's happened, people are frustrated, they you tend to see reversals. And there's some statistical truth. I don't know. Well, I do know, maybe 13 is not the exact number. And maybe there's certain conditions that it works better.

Maybe nines are not the number. Maybe it's eights. All that stuff. So there's room for refinement on all this kind of stuff. But the gist is mean reversion does seem to work. And the DeMarc indicators are complementary of that. Now, is it the DeMarc indicators or is it just mean reversion? That, of course, is up for debate. But again, if you have...

somebody like, uh, Steve Cohen was partnered in DeMarge analytics. And you look at some of the 0.72 training, uh,

Videos and you see some of their analysts have to mark up all the time Well, maybe if the PM's are looking at it and are allocating at prices where there's exhaustion It just like regular support and resistance the stuff becomes sort of self-fulfilling. Well, I know that actually Tom DeMark threw out a first pitch at the Mets game. That's how much Stevie loves Him he gave that's hilarious. I didn't even know that He gave him a lifetime achievement award, you know George from from Real Vision. I

Yeah, George S. Yeah, yeah. Raul got invited to the thing and he brought George as his plus one. That's amazing. Yeah, yeah. And I think so. They didn't invite me.

I know how much they love DeMar. It's nice to know where you stand, right? I know. George and I are friends. But yeah, certainly, certainly real people follow DeMar. I guess, where did this come from? I know that you spent some formative years working for, for Niederhofer sort of like famously focused on these, these,

and obscure signals, I guess would be, would be the way to put it. I would love to hear about like that experience and how much of the sort of like early trading philosophy you had was influenced by mentors like that. Yeah. Victor was, um, it was a big change for me because I went from like, like I said, my more formative years, it was more technical and, uh,

While I was working with my prior partner at the RIA, he handed me Victor's book actually. And I read it and I fell in love with education of a speculator. I thought it was just a really beautiful book and really transformed the way I started to think about markets. It transformed me so much that I really wanted to start learning how to backtest all this stuff and started to learn how to code. So for that year after I read the book, I was recreating a lot of studies in the book. Anyway, long story short, I somehow found his email.

and I emailed him a bunch of studies that I recreated from his book and he liked it so much he invited me out to to New York to have lunch with him and that was funny because it wasn't lunch he took me out to see Fantasia like the Lincoln Center like play and I was just I had a seat like so far away from him he kind of just put me somewhere like and I couldn't find him after and then I had to like

find a cat back to his place after it was just it was very it was very funny what do you mean you couldn't find him isn't he like six foot ten yeah and wears a pink like hat all the time yeah but it's still coming i still can't uh anyway uh we hit it off uh yeah and um i went there with an open mind and it was very it was very transformative with you know before that i

I was young. I was in my early 20s. I saw people do pretty well in markets, but I've never seen somebody just be able to bankroll. I'm not saying... I don't want to talk about capitalization here, but I've never saw somebody be able to accumulate that much, a lot of money really, really quick. And I was blown away by Victor and by his finesse and swagger in markets. It was like...

a whole new revelation of how somebody could could look in markets and he was pretty short term oriented and very quantitative and that and we spent you know four four years or so working together um building these shorter term systems across global macro assets and uh yeah it was it was very transformational to how i think and i think for the next ever since then i've

everything I look at, I have to test. I have to look at things from a, from a quantitative perspective. Um, if somebody just throws out some cliche about the markets, like, oh, well it's, it's Friday and the market's down. So, you know, everyone's, uh, hedging some, right. It's like, well, did you test that? Like, why are you just, why are you just saying that? Because I realized, you know, uh, it's, it's not, uh, it's not a professional thing to do that.

say things that might not be true, especially grand overtures about market prices and market movements that might be cliches that you might need to do the opposite of. So, yeah, I found very transformational for my philosophy of markets. What are the sorts of things that you were backtesting and then potentially putting into into live strategies while you were there?

It was very short-term oriented, like multivariates cross-asset books. So we would be looking at, I don't want to give too much away, but I'll get simple. Maybe like, well, let's say it's something as simple as, you know, it's a Friday and the market opened lower and the bonds opened higher and the market went down for the first two hours and the bonds went up for the first two hours. Like if you don't know that, right?

I think you're at a complete disadvantage in short-term trading. If you don't have every time that that's happened in front of you with statistics and a very detailed explanation of what you should expect for the S&P, for the bonds, for whatever you're trading, that was the foundation for trying to build systems from there. Because

It doesn't sound very sophisticated, but you don't need to be very sophisticated. Any system is better than no system, and just using blind judgment or vibes is...

It's coin flipping and sometimes better to have some sort of historical precedent for whatever you're doing. But to answer your question, we were taking the research and we were hand trading the stuff. So we weren't blackboxing any of these systems. I know that some of the Victor alumni are very successful CTAs. I'm sure they have automated strategies that they might have taken.

and evolved some of the things that they learned with Victor and I'm sure they're, they're doing very, very well on the automated side. Um, but when we were there, we were still, um, you know, hand trading, all that stuff. And do you still hand trade today? Are you automating? Um, there's some automation, uh, but I would say because, you know, the timeframe doesn't require me to, to be automated and,

When the facts change, it's usually not price related. So to take those qualitative variables and formulate some kind of grand trading AI be a daunting task. So yeah, there's some automation on some of the quantitative strategies that we do now. But for the multi-week sort of things that we were discussing before, that's

We're trading in and out of positions. And yeah, that's a slow moving train. Today's episode is brought to you by Fintool, the AI junior analyst tailored specifically for institutional investors. Everyone in finance is racing to figure out how AI can best be integrated into their investment process. And one of the biggest areas that is catching on with institutional investors is analyzing SEC filings and earnings call transcripts.

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And does it translate well to trying to launch and raise a commingled vehicle? Do you find that the people who are interested in managed accounts are also interested in a fund? When I was at Real Vision, it was interesting. In 2019, I left. I was doing consulting for one of the biggest jewelry companies in America. And I was a FX trader there. We were automating a lot of their currency risks.

And, um, I kind of realized like, I don't, something happened after 2018. I think I got, this was like seven or eight years ago. I saw, uh, I had an experience on a prop trading floor where I saw a lot of really, really successful people from the pit sort of

I don't know. They became kind of like dinosaurs. And I was, I got kind of scared. So like, what if I just stop? Cause it's speculative, it's gambling and some people are good at it. Some people are not. And then, but you never know one day you might not have the mental fortitude or sorry, aptitude to continue to do this. And I got, I got pretty scared in 2019 that Holy, you know, this, this might come to an end, you know, if, if AI takes over and, uh,

markets are flat for the next 50 years um you know how am i gonna make a living i went and i did an mba right around the time that covid started um uh there's a school right by me uh babson next to where i grew up and i've always kind of looked up to that school um and they kind of and i was never a good test taker too i sucked at test taking the only test i ever did okay at was the one that got me into law school like lsas but like i took a gmat and i'm just like

it's hard for me to, to be a really good test taker. So I was not going to get into Harvard. I don't think with my GMAT scores, uh, but I got into, I got into Babson and, um, you're selling it short. It's a good, they have a really good like entrepreneurship. Yeah, for sure. Yeah, for sure. And it's like close by and, you know, I grew up in Needham right next to Wellesley. Um, so yeah, it was, it was great. And, um,

From there, because I wanted to take that transition away from just being an independent trader, and I did have some experience trading other people's money in a prop function or whatever. And I thought, well, let me try the managed account side. And at first it was friends and family, and then the friends and family introduced me to some other people. And I really liked it a lot.

Now, having said that, partners and investors, you have to be very intimate with them. You have to understand them very well and they have to understand you very well. And I didn't learn that until much later on that you really want great partners. You know, you don't want somebody who's going to, you know, they see you're down 3% mid month and then start to bombard you with questions and start to, you know, try to

dig in because maybe they're down to, and maybe they're, uh, maybe they're trying to get some sort of, uh, um, misanthropic, you know, sort of gain through cutting your skin a little bit. Like there there's, there's people who do that. Um, and then I, you know, I've had to let, I've had to let people go. I'm like, I don't want to deal with you anymore. Um, uh, so does it translate into the hedge fund world?

The hedge fund world, I think you have staff more. We have an investor relations person, chief of staff, who deals with questions, concerns, all that stuff. But for the most part, we're looking for partners who understand our strategy better.

who understand us, who understand our philosophy about markets. And I think that's very, very important to be selective. I know some people may be getting into finding... They just want money. They just want money to trade with. They want investors. We'll learn eventually that not all partners are created equal. And I think that's been the biggest sort of...

sort of thing. No, it's this weird dichotomy where I think just about everybody that I've had on the podcast kind of says the same thing. But then they also, if you ask them like gun to your head, somebody is willing to seed you with like a hundred million dollars, but there's like all these constraints on it. They're like, take it, take the hundred. Like it's simultaneously. Both things can be true that like, it is incredibly hard to get like that type of seed capital. But at the same time, like, you know,

Once it's less of a problem, it starts to matter a lot more. But let's take a turn then and talk about selling your views. You had a... I forget what it was called. Yeah.

But you had a trading room and a newsletter where you would talk about the trades that you're putting on when you were trading your own capital. Did that help you to crystallize your process? Did you meet investors through that? Is it just a good way for people who are trading their own money to supplement while they're trying to build?

I think if you're good, it's an incredible business. It's a very, very difficult business. And I think, yeah, I've been on the buy side for a while. And then I've had moments where, hey, I want to take this skill set. I think I'm good at predicting markets. And I want to subsidize my day-to-day activity with steady income of sharing ideas. And I think that's fine.

Um, but I think to be really, really great at it takes a lot of work. Um, it's very difficult to sell confidence. You know, you can't sell conviction. It's, it's extremely difficult. And, um, there are certainly some people, you know, I look at someone like Citrini. I think he does a phenomenal job with the thematic stuff. Um,

I don't know how he does trading-wise for P&L, but I know that I don't fade his ideas necessarily. Or the macro ALF guy, I think he started his own hedge fund recently or something. Yeah.

And again, I don't know his PNL. I think I, so there's a, there's a big difference between obviously between, you know, investing and sharing ideas. Um, one will drive you crazy. One others will drive you crazy. And, um,

Yeah. It's, is it, is it good for getting your name out? A hundred percent. Is it good for meeting investors? I don't know. I haven't, you know, I had a close to like a hundred subscribers, I think at my peak on a monthly basis. And while I'd made really, really great friends, you know, some of them, I would go to Europe, you know, put a tweet out. I'd have like four or five of my old subscribers reach out to me. We'd go hang out, have a beer, have a coffee or something, wherever, wherever I was.

I made some really, really incredible connections. Did that translate into AUM? I don't think so. But, you know, on a personal level, I think it's fantastic. I know this isn't like a personal level podcast, but I thought it was a very, it was a very fulfilling thing for me personally, just because I really enjoy, you know, expanding my connections. And the thing is, like,

On the internet, I think you have to be authentic. I think you have to be yourself, really. And naturally, if you're yourself and you're not pandering to anybody politically or whatever, you're going to attract people who you're going to like as well. And that was the biggest thing for me from the newsletter. It made good money.

But it really expanded a lot of my connections and network in a way that I never thought that it would have. But it didn't necessarily translate into more money for a hedge fund necessarily. Yeah. I mean, some people like there's two schools of thought. One is like just get as much stuff out there as you can so that you get eyeballs, build your name. The other is, you know, if you're so good, your ideas are so precious, right?

And nothing needs to get out there. And, you know, I think obviously like there are certain things that where that is true, but yeah,

Or the other idea is like, well, if people can just buy the ideas, well, why wouldn't they give you any money? And as you said, you can't sell conviction. And that is one of the key points to it. So many people are like, they follow the model, they love the model, whatever it is, but they don't have the constitution to trade it. Or maybe they don't have the systems or the technology or the know-how to trade it. And eventually they're just like,

Just take it like you just take this for me. Like, I don't want to I'm tired of the headache myself. And yeah, that's why I always thought the whole, you know, you have to be secretive about your strategies. I always thought that that was that was bullshit. I never understood that. I think markets are too transitional and they change so quickly.

Even if you have a really, really... I'm talking about general strategy, not, okay, someone's taking advantage of the options Indian market that's going to profit them billions of dollars. Okay, fine. But that's parasitic in nature. That's not speculative. If you have a speculative strategy that does pretty well and you came to that conclusion through your own mental facilities, that's very difficult to give to somebody else and they're going to start to extract profits the same way that you would. It's just...

You can't download information like the matrix where you automatically get to the same point that somebody else does. I know you can. We speak the same language. We speak English. We try to convey as much information as possible. But at the end of the day, conviction is conviction. And when the idea is... It's like, remember in Inception, it's that same kind of thing. It has to be a natural idea formed in your head to have the maximum conviction. So yeah, I always thought that...

But the skill set of a trader was very important in that regard because you can give somebody a winning strategy and they'll still somehow not take it to full advantage or somehow end up losing money with us. It's like analyzing 13Fs. It's kind of backward looking. It's not always the flick. As we know, you could have, whether it's total return swaps or you're trading non-US securities, there's so much that goes into a portfolio that's not 13F-based.

but people still like look at them. They're like, Oh, so-and-so must be up like X percent.

And sometimes that bifurcation between like the public facing ideas and the reality of the track record is like, that's the trading skill. Like so-and-so publishes their biggest ideas. And then those ideas go through a big drawdown and everyone's waiting for like their monthly numbers to come out so that they can dunk on them for being down. And then they like eked out like a slightly positive return when you know that they have this big exposure to this thing. I'm like, yeah, that's the skill of the man in the seat right there. That's why, yeah.

people get paid well for this business is because they're not just the sum of their ideas they're the sum of their decisions i love when i'm like waiting for somebody's numbers to come out and i'm like oh they're gonna wear like a pretty bad red number and then it's like oh wow like they were flat or only like i i i know that feeling uh because i'd like

I have a couple of friends in the hedge fund business and I know some of their positions going into a month. And then I see all of them just like go the other way. And then I see them like flat for the month. I'm like, God damn, I am proud of you, dude. Good job because you know, their exposure and, uh, you know, it takes a skill, like it's really tough. It's really tough. Uh, especially when you're in the hole and, um, are you dodging bullets and you have to make hard decisions when you're already down in a drawdown. Um, yeah.

Yeah, I mean, you feel like the world is ending, your career might, you know, you have career risk and everything. There's a lot to be said for people who can eke out a profit when, you know, their views are going the other way on prices. So, yeah.

Well, yeah. I wanted to get into that a little bit because we were supposed to do this a couple weeks ago and you're just like, dude, I can't do it today. There's too much going on. I think we were scheduled for, I don't know if it was the day that the market was down like 4% or something like that. Yeah, something like that.

I think it was, I don't know what it was, but I know that I didn't sleep the day before and I was like, I can't do this right now, Max. Yeah. Yeah. But so like when that happens, when you come in, everybody's, it's the new bull market. It's the new Trump bull market. We're long and strong. Crypto is going to the moon. All of these things are happening. And then suddenly big reversal like.

how and and you're and you're take you're taking it on the chin uh what do you do when you're in the hole like that well i think the most important thing is uh you can't panic you have to understand that um these things happen um and i think you have to look at the situation objectively like uh lay out all the facts what has changed what hasn't changed um

Obviously, if you have big positions and they're not working, it's time to, at the very minimum, reduce them by half. Because there's a good chance you might be able to buy that half back at a much better price. So those are the two things. Number one, I would say the first thing is probably without even thinking. I'm guilty of not doing this sometimes. Really great traders kind of just do it without any afterthought. Because it's super easy to add to losing positions. It's pretty difficult to scale out a half.

wait and see how the market develops. And objectively, that's always going to be a better call. And I, and I try to stick with that. So the first thing, you know, is try to reduce the big positions unless they're like, unless they're the kind of positions that might profit off this kind of environment, then, you know,

maybe keep them on or maybe even make them bigger. Who knows? I think everything needs to be judged on its own merit. And then, yeah, reevaluation of the facts. What has changed? And maybe we can go through that mental exercise for tariffs right now. Yeah. What has changed for tariffs? Well, they're certainly bigger this time around. Trump 1.0 tariffs, more

markets were a little bit volatile, not as volatile as this time. We just had a 10% correction off all time highs, small caps, like 15% correction off a 52 week high. Um, meanwhile, you know, um,

The difficult part with now is how much of the last decline was tariffs and how much of it was Tesla pulling back from 500? How much was it Palantir coming off of one, one 30 or whatever it was, how much of it was, you know, arc making a 52 week high and all the meme stuff coming off. Um, very difficult to say. I want to attribute 30% tariffs, 70%, uh, really stupid valuations in the short term. Um, and,

And then, you know, now I'm re-evaluating that because that was true two weeks ago when you could have bought the dip when Tesla, you know, got down to 150 times earnings or whatever it was. But now it's, you know, as we're approaching that April 2nd deadline and it's Friday, it seems like the markets really, really care about the tariffs. And it wasn't so much about, you know, the meme stocks so much anymore. That's what it kind of feels like.

No, no. And I hate these like tropes, but I think back to Trump 1.0 and, you know, there was a sort of like.

economic orthodoxy consensus like yeah trade wars are bad like coming into it and it's the sort of wall of worry versus slope of hope trope and it's like last time around everybody kind of agreed it was like well yeah we're gonna be in a trade war like that's gonna be bad for prices like this time we kind of all like tricked ourselves into thinking like no no like tariffs like don't actually work like that and so like the issue is last time we were like this is bad

bad economic policy and every single time something good happened we were able to like rally on that and this time we kind of like came in being like it's not gonna be so bad he's not he doesn't really mean it and so like the starting point the starting point is very different like the policies are somewhat similar but i think you know we kind of all agreed the first time it's like this is bad policy and this time it didn't really feel like we had that consensus and thus we

There isn't the wall of worry to climb. It's the slope of hope to slide down. The starting conditions are completely different. I think you're absolutely right there. And from a positioning standpoint, the fact that this happened right off a fresh all-time high, very, very different. And where rates are are completely different to where rates were back when Trump started. So then I guess as you're reassessing, what is your view going forward? I mean, I know that you...

like generally like you like to be long not that you don't like get short or reduce your exposure but you know four out of five years uh it goes up like it's the only you know it's the only game in the casino where you get to bet with the house um don't get me wrong i make money in down markets sometimes too like we i don't know if i should talk i don't know if i can talk about performance but i don't know february like february the market was down

We were okay. I don't want to say numbers, but I'm just saying that. Yeah. Well, like our strategy does tend to make money off short side, but February was so easy. Like you could have shorted up any, any stupid stock that was up like a stupid amount, even on a little bit and hedged out your long exposure and you probably did. Okay.

March was tough because the market was already down coming into March. It's already pulled back. So obviously as a trader, you cover your risk, you cover some of your shorts, you start to buy into stuff that you like. And if you do that too early, well, then you're f'd. Yeah. So are you, as you're reassessing the tariff risk, what is the conclusion that you're coming to? I think a lot of it is already priced in. If you look at

the numbers. We just had a $5 trillion pullback in global stocks on tariffs, whatever. We import about a billion, I mean a trillion

and what's whatever the 20% even if it's 50% tariffs on a trillion in imports the market reaction seems a little bit insane now bonds coming off this week specifically was a little bit weird especially as the market was coming off this entire week I thought that was very strange but then I started to realize that

Well, maybe it's because the core PCE print was the, the, the fact that we rallied today in bonds, like almost a percent in, in the long end. Um, I don't know what, I don't know how many basis points reality, but I mean, bond prices rallied almost more than a percent. Um, I think that basically said that all week, um,

It cared more about this week's print than it did about tariffs. The fact that we reversed basically the last three sessions. So market prices are weird. They're telling us a bunch of different stories and they're making lives for bulls incredibly difficult. I just don't have a super strong opinion. I think you have to try and be a little bit long into sort of panics and sort of big declines.

But would I be like, you know, pounding the table on just buying as much stocks as possible for Trump 2.0 and make America great again? I don't know. I don't think so. I think it's different this time around. I think they're very clear on their policy that, you know, they're willing to take pain, basically.

Um, and it's very clear that the feds, uh, independence is very important and I don't think they're going to be bullied or pressured by, um, you know, the admin. Um, and I think they're doing a good job of, uh, combating inflation for sure. Um, you could say that, uh, you know, was it naturally bound to happen even without rate, rate hikes? Probably not. But at this point, I feel like the

They're probably approaching the apex of economic risk with keeping rates this high, especially with this level of uncertainty. It feels like we're getting to that. And that's what stocks are caring about at this point. That's what it really feels like. We're just approaching the apex of uncertainty, economic uncertainty with high rates and the market's finally starting to pull back. So it's a very, very interesting time, especially in a world

where the greatest advent of productivity is being released every single day. AI, it's the most deflationary thing you can possibly think of. Yeah, it's a very, very interesting market. Not one that I'm fully understanding how to trade in the short term, but I think higher timeframe is going to provide some really, really excellent opportunities.

So are you a seller of rate cut expectations? If you believe that the Fed is going to cut twice this year, three times, maybe more, do you think that that's maybe a bit gung-ho? I mean, we just got inflation today, came in a little hot.

But the bonds rallied substantially. I know, right? Yeah. Yeah, that's the kind of – that's what I alluded to earlier when I said treasuries and fixed income provide the greatest divergence between reality and expectations. That's that example, I think. You come in, bonds are down four days in a row when the market is down.

into an already expecting hot print and then the bonds completely rally. Well, everyone's just waiting for the uncertainty of what the print is to buy, right? Yeah, maybe. They're like, oh, we're going to have a hot print, so let's just wait to buy because it's going to be better. And then everybody had the same idea and you get the hot print and bonds rally.

For treasuries, you always have to take the other side of, especially when prices go one way. Like the greatest trade ever was selling bonds, right? As soon as they announced rate cuts back in September of last year, that was like one of the best trades ever. I was on the wrong side. I was pounding the table. I was like every day. I was like, like not only was the DeMarc stuff, it was just very, I don't know.

Because as soon as they announce rates, what's going to happen? Well, the economy is going to start to pick up a little bit and the bonds are going to see right through that the first day. And anyway, so when you get one sided opinions and that can happen in like the higher time frame, like we saw back in September last year, and it can happen over a three day period like we just saw in the last few days or so.

um that's the kind of trading you know i i really like to do i don't really try to cement myself into um a fundamental view on on interest rates necessarily um just because the fed is their slow moving train you know or a big very large ship um so but with stocks maybe i do have a bias to the long side um that's not to say i don't hedge and i try to make money on on shorting um

But in general, there's just so much, so many things working for the improving state of the world, regardless of what your political affiliation or cult is. There's so many things in Western society that are improving in the medium term. Yeah, there are definitely some worrying things, but...

I think we're going through a transitional period. We're about to enter an extremely productive period. And we'll see if that's true. But it's not really going to matter if there's going to be a recession. Yeah. Well, I mean, we've been talking about what's driving the market lower, and we haven't even talked about the underlying economic strength at all, which has been flashing some light. So do you think that, you said,

Before your 30% tariffs, 70% valuations, if you were to say some of this hiccup in March, what percent tariffs, what percent valuation, what percent real economic slowdown? Real economic slowdown. Well, the bonds at the start of the month were thinking...

That it was real. But if you take a look at energy stocks, which you would think, if there's any real concern about a recession, energy stocks would be down huge at this point. But hard commodities are rallying. And even oil is rallying. And you would expect, okay, maybe gold would rally. But in a recessionary expectation, you would think gold up, crude down. Crude's up too. Okay, look, core PCE is hot too. Look at Visa. Look at MasterCard.

trading very, very well. I don't see the red lights or flashing signals just yet. I think you've been seeing it for a while in housing. That data has been bearish for the last three or four quarters at this point. And I'm really scared that it's going to accelerate at this point. But I think consumerism as a whole is still hanging in pretty well. Is it outstanding? No. Is it worrisome? I don't think so.

yeah that housing side so i have been like disclosure like short housing stocks and that has been working and i've been making money but you know all good things must come to an end and i'm like i'm with you like i do think it looks like it might accelerate but also just the natural mean reversion tendencies are so hard to fight like what do you do when like

I'm sure this is something you deal with a lot because you do trade this sort of like move exhaustion. Like you've you've gotten it right. You nailed the move and it keeps getting worse or it looks like it's not going to get better at the very least. But the technicals would say, hey, you know, it's time for a breather in this in this trend. What do you do? Probably I'm about to make some sort of regret. Yeah.

Nine times out of ten, my next move, I'm going to regret it. You always regret it. There's only two trade sizes in hindsight, too large and too small. It all depends on which way the trade went. Yeah, you have to do what you have to do. And you have to do... We're all working with limited information and we're working with uncertainty. And I don't think you should necessarily take the whole position off or add to the position or something.

But, you know, I think as uncertainty increases, I think your position sides have to decrease. It's just a very linear relationship between the two. And at the very least, yeah, just decrease your position size and wait for things to evolve because maybe, yeah, you get a short term bounce and you can you can reshort it. And look, maybe the Fed isn't going to because you just saw core PC pretty hot, but the technicals look pretty oversold. And maybe, yeah, the bonds are bouncing today and maybe you'll see housing bounce for the next few days or next couple of weeks.

That should be in the bingo cards of expectations. And then maybe reevaluates, you know, in a week or two to see what's coming, you know, or at the next Fed conference to see how the tariff developments were. Because these things are, you know, the kinds of trades that you're talking about, they're super higher timeframe. Like the big moves aren't going to happen in the next couple of weeks. I would think on the housing side.

Um, but you know, you want to have a position on the short side if things really escalate and, and go down. So, you know, Hey, you can cover half your position and then buy some puts. There you go. You get the gamma. Um, you feel a little bit more confident if it bounces cool, you lose some of your premium, but you don't lose as much money as you probably would have, you know, you do. So I'm already, I'm already, I've already in the puts. So, um, I've, I've moved on from the, from the direct short to, to just the puts. Um,

Yeah, I mean, it's very intimate how we trade. I don't think there's a right way. Well, I'm going to take advantage of this and I'm just going to ask you about my stuff while I've got you. I'm just going to selfishly... Sorry to everybody else. By the way, I was going to bring it up. You started the whole conversation off with a short side and I was going to make a joke about how you're just a dumb bear. I mean, look, I just have to recognize that I'm trying to get better about...

like not being a dumb bear and buying stuff. So I did buy some stuff. I bought some Chinese stocks and they're doing very, very well. So I'm trying to at least have some long exposure. But yeah, like I told you, like on Monday, I was down 12%.

So you can tell where my biases are. All-time highs today. But what about outside of the U.S.? Obviously, that was something everybody came in sort of thinking like it's the great U.S. bull market. We had the Economist cover, just like the alligator jaws of U.S. versus the rest of the world.

Um, have you been dabbling in some of these other markets? I have. Yeah. Um, uh, I'll go over. Okay. So at the start of the year, I thought this, the setup and the dollar was very, very clear. Um, it was short dollar trade and all you had to do going into the year was to start to buy emerging markets in China and, uh, things like gold miners and silver and all that stuff. And, uh, we did pretty well in, um,

In January. And then now. That whole narrative. I don't know what happened. But in the last two weeks. Every single financial publication.

Because without any attribution to what the dollar is doing, has decided this is the end of American supremacy. There are no more returns in America. The tariff man is going to destroy America and Elon Musk is going to destroy America too. And America is uninvestable. I don't see how that change, DXY going from 112 or whatever down to 103 is...

That was the culprit for all these things, you know, Europe starting to outperform. I mean, do you really believe European demographics are improving so much over the U.S. that the U.S. is now uninvestable? You think that

defense spending against Russia is going to somehow revive the European economy. Like, absolutely not. It's so, yeah, I think like you can trade the stuff and I do when I have like a macro conviction on something like the dollar. Um, but no, I'm, I,

I think just like in fixed income, when you see these divergence of extreme opinions, it happens on the allocator side too. And somehow these people convince themselves that the Western world is going to underperform or the U S is somehow going to change its trajectory for the next three or four years of a 15 year secular trend of outperformance. I don't see that happening. But you could have like a year. I mean the,

At the end of the day, it's woes, right? And if the ex-US money is able to convince itself of this narrative and start buying their own markets or their other markets and sell US assets for a while, it could continue. It certainly could. It's all about the marginal dollar, right? I think that's true. Yeah.

Yeah. And it is all about flows. And sure, the Norwegian Wealth Fund could probably control the flows in the S&P for the next week or two. They're doing a 3% change in their portfolio from US to Europe, and that can have a material impact on our markets. But I like to think that markets don't work well.

like that i like to think that markets will eventually repriced where they should go and in my opinion like okay if you were if you if you're now getting into your i think you're already you're already fourth or fifth inning okay fine maybe you make some money but i don't think there's much alpha like i think the alpha was is done maybe both do okay but

Maybe I'm wrong. Maybe I'm just a patriot. I don't know. I moved here. I have to, I have to, you know, I have to make sure that I moved here for good reasons. I would expect nothing less from the child of, of, uh, you know, Eastern central Asian immigrants to, uh, be nothing but bullish on the U S versus the rest of the world. And I'm glad that, uh, that bias is still holds true. I saw like,

I saw a thing. It's interesting, though, like the people in the world who like still kind of like feel positively about the US. And I've told this story for a while now. So who knows if the data like still holds, but

following one of those like maps accounts where they have surveys and all sorts of things. And one of the ones I thought that was really interesting was they asked every country in Europe, like if you could live in one other country, what would it be? And, you know, like the UK, they said Australia in Switzerland, they said Germany in Germany, they said Switzerland, like Austria, like they said all these things. And Ireland was the only country that was like America. Duh. And, you know,

As an American, perhaps it's my own bias too, but you like to see that sometimes. It's like, yeah, at least there's one country out there that doesn't hate us, isn't rooting for our downfall. No, I don't think anybody hates us. Maybe they hate our leadership sometimes or all the time. Who knows? I don't know. I like to think people are individualistic and take things

take the merits of each other based on those things, not as a culture or a society. All right. We'll leave it there with you, Peter, the Patriot Pinkasov. That's my new nickname for you. Thank you so much for doing this. Thanks for having me on, man. Really appreciate it. Yeah, hope to do it again soon. Yeah, sounds good. All right.