My Investment Philosophy as Best as I can explain. dfuq do I actually do

A lot of people think I’m “insane” or “on drugs”, per Twitter discourse .I want to explain what I do for a living and how it all fits together.

Everything Is Rigged

First - I believe the market is rigged. There isn’t a printer that goes brr. Central Banks buy assets - bonds, and sometimes ETFs. Credit instruments and equities sensitive to credit rates get influenced by the daily actions of central banks. So I go and read about what Central Banks say they’re going to buy. Then I design strategies to detect if they’re doing something stupid regarding their purchases. And - if possible, I front-run them.

This is a good business. It wouldn’t be if Central Banks stopped rigging markets. But they won’t. Because there isn’t adequate demand for the mountain of debt created by an unprecedented fiscal blowout which also raises inflation.

Rigging Compresses Fundamental Volatility

Second - because the market is rigged, it compresses the fundamental volatility of stocks to only a couple days around earnings. Everyone has credit card data, real time Instragram download data and much more powerful tools than they did 10 years ago - to measure the performance of companies. Company management also has far more intra-quarter meetings. So when you see something like META stock dropping 26% on earnings - you have to ask - how?

How can a $300b stock with nearly perfect real time information and constant investor updates move 26% in a day? This is the question.

My answer? The omnipresence of ETFs combined with the endless bid from asset price manipulation means that while companies aren’t releasing earnings, their prices are driven by totally non-fundamental actors. So even though earnings volatility should drop if we live in a real-time data driven society, this is not true in practice because the market is rigged. And rigging moves fundamental volatility into an explosive, quarterly format.

I profit on this volatility in two ways. First - I design strategies to react to earnings very quickly and at scale. And second - I identify options which systematically misprice earnings vol. This is the other side of the coin. I have an idea - intra-quarter, how assets get distorted, which gives me an idea about the risk reward of responding to earnings. As earnings are kind of like the bubble of that distortion getting popped. I know better than other people how full the balloon is.

Rigging Results in the Destruction of Purchasing Power

Third - the periodic debasement of currencies due to this endless rigging is exploitable. Central banks cannot (or do not) coordinate their intervention. And the debt driven system is based on proximity to the hegemony (which is the US).

If you think about the act of rigging something, it implies a power dynamic. If you weren’t forced to hold US dollars by the sovereign you wouldn’t tolerate the Fed printing them and buying random shit with them. But you tolerate it because guys with guns say you must. These power dynamics shift, but are predictable over specific windows - resulting in sovereign “betas”. A play on terms - because there is usually an ‘alpha’ (chad) and a beta (virgin) in every currency cross, which results in a correlation to the market that expresses the power dynamic and results in literal market beta.

In internet mind rot language: CHF is Chad. GBP is virgin. GBPCHF trades with stocks. Long stocks short GBPCHF gets you long debasement without the risk.

Long story short - you can own assets and short fiat currencies that correlate with those assets, and harvest a surprisingly persistent payout. And this is intrinsic to globally rigged markets so I can underwrite it persisting.

In summary if every central bank all prints at the same rate, which they’re forced to do - but investors have mild preferences for USD and CHF (which they do) - then you can go long risk assets and long USD and CHF FX crosses and hedge assets like Gold, Stocks, cryptocurrencies - etc.

Rigging Results In Deadweight Loss and a Society of Degenerates

Fourth - the society that results from this exploitation – inevitably loses its will to work, procreate or do meaningful things. Wealth is entirely determined by proximity to the sovereign and its cronies. Big companies get bail outs. Small companies fail. Wealth disparity is near the levels only seen since prior to the Great Depression. People cannot really afford to have families so they gamble. The desire to gamble is a direct result of a rigged economic system. You cannot get ahead by skill, so you must try and get ahead by luck. And if you get fucked, then it’s not really any different than if you never played. Squid games.

And when society isn’t gambling - they’re on their phones.

Thus - thematically, I focus a lot on measuring retail trading dynamics. Because the new generation of gamblers is entirely digitally native - it’s worth quantifying and productizing measuring how they flock into assets. I am happy to underwrite that this will keep happening so long as the rigging keeps happening, and stocks randomly make giant moves because of the structural volatility manipulation. This combination explains - in part the hyper growth of the options market. These dynamics are even more powerful when amplified by Central Bank money printing.

I used to run an advertising company so I know a thing or two about how to measure retail traders. You’re probably on this site because of my Twitter - which is part of this effort.

Degeneration will Eventually Result in Full Scale Sovereign Collapse

Fifth - a rigged society with an increasing percentage of its youth gambling, and completely addicted to their mobile device - will eventually fall apart. The reserve currency debt game isn’t sustainable. It’s impossible to know exactly when the ponzi will fall apart. I think it’ll be 2034 when the social security cliff hits but it might start getting priced sooner. As such if you are with me so far - it is actually insane to accumulate money in US Dollars.

Thus - I am a true believer in cryptocurrency. As it’s become clearer and clearer that we’re never going to pay off all the debt we generated in COVID, I’ve become more wildly enthusiastic about the asset class.

Unlike my stock and fiat investments which primarily focus on the market being rigged, I view crypto from either a data tracking lens (crypto has much more robust data tracking that is possible due to its purely digital nature) or a fundamental lens (crypto supply dynamics drive prices to a large extent, and are modelable - and seem to be far more lagged to news than traditional markets). I also have excellent information flow in my home of Puerto Rico for the asset class.

This Sovereign Collapse and the Demise of Human Intelligence will be Supplanted by Artificial Intelligence

Sixth - if you cannot tell, I am structurally bearish human intelligence.

The flip side of this, is I’m extremely bullish on artificial intelligence. Not only does AI directly help me execute my various trading strategies – ranging from extracting key central bank commentary, to processing earnings releases - the progress I’m seeing in the tools is truly staggering. The idea of computers ruling over society seemed far flung a year ago, but – if you compare it to the likely option of having Trump, or Biden running things - it doesn’t seem nearly as insane. I think in the future - sentient machines will not really want to interface with human governments or their currencies.

As such, I also invest at the intersection between artificial intelligence and cryptocurrency.

The GoodAlexander Investment Philosophy

  1. Front run central banks (400-500 position long/short equity and etf portfolio, medium frequency trading)
  2. Trade really quickly after earnings (varies, usually short hold after earnings releases or options into earnings. also medium frequency)
  3. Harvest macro risk premium from global central bank chaos - typically long futures and short correlated FX crosses. Longer frequency (2 weeks - 1 month)
  4. Measure and monetize financial degeneracy that results from 1-3 using proprietary data - short term trading strategies focused on meme stocks, and meme coins (medium frequency, daily)
  5. Assume that this all ends in tears for existing governments and move $ into crypto - basket of appealing longs, driven by fundamental analysis and information flow (long term 3-4 month holds)
  6. Bet that AI ends up supplanting human decision-making in all areas ranging from investment to governance - focus on AI cryptocurrencies, applying AI to strategies 1-5 (internal tooling, private deals – very long horizon 3-5 yr)

So at any given time I have a ton of bets, many different strategies, and am constantly exhausted. Doing this is a lot of work. I do it mostly myself with the help of 2 engineers. It’s deeply fulfilling and I’m grateful to be able to do it. As nihilistic as I am - the 14 year old in me who had his house impounded due to trading losses still viscerally enjoys making money as an investor.

Stuff is really starting to come together. And I have some big decisions to make in coming weeks, as the AI crypto space has come lurching out of the meme-world into reality.

Will I continue with trading or will I go all in on the rise of the Accelerationist God?

I’m not sure.

Suppose it’s a high class problem innit.