"Forget What You Think Know", Fund Manager Advises "Trade Your Emotions, Not The Facts"

Tyler Durden's picture

We're constantly told that we should learn from every experience, but stick around long enough (like the last 10 years of rigged markets) and you realize that there are some things it's better to forget.

The issue, of course, as Richard Breslow, former FX trader and fund manager who writes for Bloomberg, are you taking away the right lesson?

Garbage in and garbage out is no way to improve yourself. And you actually won’t become a better investor, if your thesis is based on it’s better to be lucky than smart.



It's a world where you thought you had dodged any weekend missteps and could get on with the week's business as Monday booted off. Only to wake this morning to "Aides Race to Limit Fallout." And it almost ceases to matter what it's about this time. So the lessons you need to keep learning is what traders care about here and now and lean on those biases. Flavor of the moment trumps grand design.


People have decided that it's Europe's turn to shine. Yes, there is that Italian election, but it's not soon and political crisis fatigue has most definitely settled in. Not to mention, the Germans are suddenly talking uncharacteristically nice.



I suspect that one has a sell-by date worth considering. The euro is trying to act the safe haven. Which makes it a buy on dips. Better growth is getting much more headline space than unemployment and structural mayhem. For the nonce Investors are just not ready to abandon bond markets. And no one’s been more bemused than me. It doesn’t matter how many theoretical discussions you have about term premia and central bank balance sheets. Don’t take my word for it. Sovereign and IG issuance continues with a flourish, yet yields have gone nowhere and buyers are plentiful.


The big story today hasn’t been supply concessions. It’s all about peripheral spreads coming in versus bunds. Until the U.S. 10-year closes safely above 2.43%, I can’t see the risk reward in even beginning to hate them. Go figure.


The yen has gone from the easy risk-on or off- trade to tricky. As equities were making record highs, USD/JPY was busy putting in multiple days of lower highs and lows. Even as the commentary kept running to “snaps higher” on take your pick. It’s trying to break the recent pattern today, but it’s early. Worth a gander.

For what seems like forever we’ve been talking about oil and commodities collapsing. Fracking, an utterly dysfunctional OPEC, weakening China, are among the reasons cited from the alarmists out in force. In the last week we heard just the opposite. With just as much conviction. Take a look at the charts. We are classically inside very well defined ranges. Skip the drama, trade the charts. They may be the only friend you have.

Equities investors are acting like the last honest man in town. Couldn’t care less about politics, geo or domestic. And aren’t ashamed to admit it. Give ’em tax cuts and deregulation and they’re happy. Throw in repatriation holidays to fund buybacks and they’re ecstatic. Add the sovereign wealth funds and they won’t even give you a dip to buy.


Earnings per share is as outdated a concept as value investing. It is what it is, until it ain’t.


One glimpse at the following chart of world stocks and that is clear...

As Breslow concludes - The world is becoming an increasingly emotional place. To an extreme. Right now, play on those emotions, not the facts.

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This is it's picture

Good advice. Now go all in. 

Cognitive Dissonance's picture

Never go full emotional retard.

<Cus eventually the music stops.>

Consuelo's picture



Balls deep, and then stuff them in too...

RagaMuffin's picture

Pretty funny defining the the definition of fact, in a non-GAAP world

Rainman's picture

We living in a great big horror house of mirrors.

buzzsaw99's picture

So the lessons you need to keep learning is what traders care about here and now and lean on those biases. Flavor of the moment trumps grand design...


so much bs in just one sentence. flavor of the moment doesn't mean jack shit these days. get long, get passive, and enjoy a one way ride to the moon.


Just tell them that if they vote for you all of their wildest dreams will come true.  [/Napolean Dynamite]

Doug Eberhardt's picture

How about just jumping on trends? Don't know what a trend is? Read a few books. Know what a trend is? Don't forget to lock in some profit on the way up and prevent losing profit on a trend reversal with a trailing stop. 

That or train your personal robot to do it because only your emotions will fk it up. Robots have no emotions. So telling people to trade on the world's emotions, well, what's the USD/JPY doing? What's the VIX doing? What's g old and the dollar doing. Can't I just trade on that? 


mary mary's picture

Can you pick bottoms?  Tops?  If you can't, then the only thing left is trends.

I was up today in EEM, QQQ, GDX, and BND.  I mentioned them last week.

debtor of last resort's picture

Want emotions? One look at the Bernank or mr. Yellen. There's your emotion.

An overleveraged circle jerk. I'm going to write a book: Tears from 33L.

coast1's picture

I hope you guys are around today, because I got an email I wnated to share with you and see what you think...Sorry its kinda long, but it comes from Stansberry Institute and I dont know about them maybe you do...help me!  here is the email...

Dear Liberty Headlines Reader,

I just watched a troubling new interview about the gold market.

According to the U.S. Mint, sales of physical gold and silver are now in full collapse.

"A lot of money – billions of dollars – is pouring out of gold into a much different corner of the financial markets," says Dr. Steve Sjuggerud, Ph.D.

The numbers are surprising. Sales of U.S. Gold Eagle coins plummeted 84% from 2016 to 2017. Sales of U.S. Silver Coins are down 79%.

In a rare new interview, Dr. Sjuggerud explains the surprising reason why investors are dumping physical gold, and what they're buying instead.

"It's the last investment you'd expect," he adds.

Even if you don't own a single ounce of gold or silver bullion – this development could have a dramatic impact on your finances.

A longtime gold expert, Dr. Sjuggerud is best known for predicting the dot-com crash, the housing bust, DOW 20,000, and the post-2000 gold bull market. His newest take on gold is drawing a lot of attention.

You can watch his full interview, free of charge, here.

Patrick Bove, Researcher
Stansberry Research

P.S. The biggest takeaway from this new development: The collapse of physical gold could send one particular investment soaring in the months to come. He explains where at 4 minutes and 50 second

p.s.  I dont care what he says, I am buying another 5k in small demoninations of silver this week....

Consuelo's picture



'Stansberry Research' is all you need to know...   


Now run, don't walk - and keep both hands on yer wallet...

coast1's picture

My spirrit, and heart and learning all told me the same thing you guys wrote...But a wise man has many counsels, and I so apprecciate your comments...Zh comments are a cool place to hang out once in awhile... :-)

Michigander's picture

Yea, Stansberry. The cocksuckers that never saw the rise in the USD. Buy the Loonie they crooned. WRONG. Buy the Aussie dollar they cried. FUCKING WRONG.

globalintelhub's picture

It is possible to break away from the chains of your timeshare contract https://fortisconsumerlaw.com/

IENTJ's picture



whatisthat's picture

I would observe fund managers have no clue about investment trends based on they are managing a rigged marketplace.

mary mary's picture

That "US Macro-12 Month Lows" chart looks bullish to me.

The "World Macro Surprise" chart looks bullish, too.

barysenter's picture

He had a lingering sensation that something would go wrong. Just what, he did not know.