Hello world

Thank you for sharing in my first post and this little experiment of writing a substack newsletter. As someone who trades and invests full time, I share my views with many people - friends, family, other traders and investors. It’s hard to be consistent in sharing my thoughts on the market in a timely manner, and updating them when I change my mind (which is often). I post on twitter, but it’s an imperfect medium for me as a writer and for my followers who want to know what I’m thinking.

My hope is that this Substack will not only help my readers navigate these wild markets, but also help me clarify my thoughts, lay out trading plans, and stick to them. Hopefully I’ll enjoy writing and this will be a permanent thing! Or maybe I’ll lose interest and you’ll end up hearing from me less and less…

For the benefit of those who subscribe from hearing about me through the grapevine, but don’t know me personally, this is my story:

I started my trading career speculating in dot-com bubble stocks from my Duke University dorm room. I read Motley Fool and Jim Cramer and bet on stocks like JDSU, Broadcom, and Nortel. When the bubble burst, I made like an ostrich and didn’t check my account for a long time. Eventually I needed the money for something else, and cashed out $800 from what used to be a $5000 account.

Fortunately that wasn’t the end of my trading career. What I took away from that experience was that financial markets have the power to create and destroy a tremendous amount of wealth. Reading books like “Market Wizards” by Jack Schwager made me realize the possibility of turning a small amount of money into a fortune. I also happened to really enjoy trading, much more so than anything else that was on my radar at the time. Sure, I wanted to make a positive impact on the world, but I figured that would come in time after I had made a lot of money. I took a job on a bank trading desk out of university, and moved to NYC.

Bank trading desks were a great place to develop trading skills. As flow traders, we learned about market structure, liquidity, and became familiar with all the different participants in the market, with their different time horizons and behaviors. We risked the bank’s capital instead of our own, had access to institutional grade research and real time news flow, and received constant mentorship. Despite these advantages, bank trading desks suffered from attrition post 2008 due to electronification of markets and the suppression of volatility by global central banks. The industry was a game of musical chairs, where every year the underperforming traders left the industry. The three things that saved my career were moving from NYC to Singapore (where supply of traders was low), getting the opportunity to manage an FX trading desk, and learning to trade the interest rate and bond markets (which became my most profitable market).

I forgot the fourth thing - the invention of the iphone, and with it, mobile app trading. I wanted to speculate on markets outside of FX, and in 2011 I had one particular trade in mind. It was my “hedge against global catastrophe”. At the time the Fed was still printing money and debasing the dollar, Congress was threatening to let the US default on its Treasury debt, and the economy was threatening to spiral into GFC part deux. In late July 2011, I put $50k into a brokerage account and went long gold futures and short ES because I felt like the world was about to go to hell in a handbasket. As profits grew and I had more margin to play with, I doubled and tripled down. As you can see below (SPX on top, gold on the bottom), the trade went pretty well.

I turned the $50k into $400k.

I then proceeded to continue trading, and lost half of that, and then half of that half. But that’s besides the point. The fact that I could turn $50k into more than my annual salary within the space of a couple months was confirmation that trading my PA was the path to trading glory.

As I always say to myself and those who I mentor, the next big trade is always around the corner. I guess I should give thanks to former Japanese PM Shinzo Abe and current Bank of Japan governor Kuroda for that. In 2013 they embarked on a campaign to weaken the yen and bring inflation back by purchasing huge amounts of government bonds (they are still buying to this day). Usd/jpy went from 78 to 124, and I was long for much of that move.

My account grew 330% in 2012 and 735% in 2013. At some point I realized I was incredibly lucky having taken outsized risk and catching this persistent uptrend. If I didn’t tighten up my risk management, I’d eventually hit a losing streak or be on the wrong side of a volatility event and blow up my account. I went from risking 5-10% of my trading account on a single position to risking 1-2% (today it’s even less). When my daily pnl swings became larger than my annual salary, I knew it was time to go out on my own and trade my capital full time.

Since becoming a full time professional speculator, I’ve added commodities, crypto, web 3, and VC to the list of things I trade and invest in. I am the master of style drift, but I can’t help it. Trading and investing are an outlet for my intellectual curiosity and expression of my ideas. I’m thankful for the lucky breaks that got me here, and the people who took a chance on me during my career. Through my charitable foundation, some of my profits go towards nature conservation and mitigating refugee crises. Ideas turn into trades, trades *sometimes* turn into profits, and profits end up saving the life of an orangutan in Indonesia or an orphan in Bangladesh. It’s a beautiful thing, and I hope to do this for as long as I can.