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#168: When the Druck Speaks, I Listen

#168: When the Druck Speaks, I Listen

micksonmatch
October 29, 2024

S2N Spotlight

About 4 weeks ago, Stan Druckenmiller went short US bonds with about 20% of his portfolio. For those who don’t remember, Stan was George Soros’s protégé, arguably even greater than his master. I will always remember Stan for his famous quote, “Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig. It takes courage to ride a profit with huge leverage.”

These guys are the Masters of the Trading Universe. Just like watching Usain Bolt, Michael Phelps, and Tiger Woods. Here is one more from Stan, as it fits nicely with the above quote. “I like putting all my eggs in one basket and then watching the basket very carefully.”

[Disclaimer: Don’t Try this at Home]

Hat tip to Jim Bianco for this idea. You can see that this is the worst-performing bond market 29 days after the first rate cut since 1989. You can also see that there has been an increase in the MOVE index, which is the VIX of the bond market.

S2N Observations

Bitcoin looks set to make an all-time high trading just below 70,000. I am including a monthly table of Bitcoin performance. It is quite staggering, and for the HODLers out there, well done. It has not been an easy ride. I am sure there are plenty of armchair critics saying that it was easy money.

I took a look at the large speculators on the latest COT (commitment of traders) report and they were net short, pretty interesting.

Crude oil had another sharp down day dropping 6% with natural gas dropping almost 10%. The chart is the last 2 years but the stats in the table are from 41 years of data.

Finally, the number of positive week returns for the SP500 over the last 52 weeks is now above 70%. You can see on the chart this is rare but is not a good timer of a top.