I hunt the biggest trade in macro. Right now: oil and Hormuz. Macro investor | Policy Advisor | 46K on Seeking Alpha As Babylon burns, we'll light the cigars.
Dubai
Joined July 2024
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On February 21st I warned my clients of the coming war.
On February 28th, the US attacked Iran.
Since then I've said one thing: this conflict lasts longer than anyone wants to believe.
On March 5th I said: buy Frontline ($FRO), Petrobras ($PBR) and Suncor ($SU), among others.
They are up 61%, 51% and 25% since. The S&P 500 is up 14%.
On September 26th I called for re-escalation. We are in the middle of it right now.
My thesis today: the market trades the headlines and stays blindly optimistic, while the trouble and risks are higher than ever.
My confidence has gone up and down, which I shared openly. It is now very high in this trade.
I get calls wrong too. I cut them fast and I say so. I seek maximum transparency, but sometimes I do screw it up.
It's not how often you're right or wrong but how much money you make when you're right and how much money you lose when you're wrong.
On X, I post every day on the biggest trade I can find, before it becomes consensus.
Right now, it's the energy complex. I call it "The Big Long".
You should follow me if you want to join me in finding alpha or die tryin'.
Sam Kovacs retweeted
I'm joining The Morning Show shortly to chat about the oil market and oil & gas stocks:
xitter.cf/i/broadcasts/1lJQRWMLg…
Sam Kovacs retweeted
Imagine how stupid the Brazilians are after watching their markets rip higher on Bolsinaro then realize they want socialism and watch it drop. Can’t you idiots see that the markets and global investors were excited? Now you just forfeit any investments into your country?
Lula’s a real gangster, I’ll give you that.
Let’s make sure the entire world understands. In Brazil, judicial rulings in connection with federal elections are made by the court that has been in place for that very purpose, the Supreme Electoral Tribunal (TSE).
@LulaOficial requested to the TSE that the polls be extended by two more hours in the entire country, citing “transportation problems.” Who controls the transport system? Lula’s government surely more so than a senator running for president.
Instead of waiting for a TSE ruling. @LulaOficial immediately asked Brazilian Supreme Court (STF) justice @Cristianozaninm to order the polls remain open WITHOUT any TSE ruling. Within minutes (did Zanin even read the filing?), the polls were ordered to remain open by Zanin.
The STF has 11 justices. What did Zanin do before becoming an STF justice? Oh yes, he was Lula’s criminal defense lawyer in his corruption cases.
If this blatant rigging of the elections will be used to announce that Lula won, is Lula seriously expecting anyone in the international community to recognize that as a free and fair election? He knows nobody will.
Has the desperation reached a point that today is the day the mask fully comes off and Lula becomes the next Nicolas Maduro? For the sake of Brazil, I pray that is not the case.
Sam Kovacs retweeted
Pretty much.
As of the past few weeks, debt markets have almost entirely shut off access to money for any company that doesn’t have substantial revenue independent of AI data centers.
SpaceX closed $40B of debt for GPUs, but we’re investment grade and have Starlink & launch revenue.
That means the 200+ neoclouds are going to see guppy-level death and consolidation. Some will make it through, but not many.
Sam Kovacs retweeted
This pumping station on the Saudi East-West pipeline was showing around 120MW fire on 15:30Z today, which is too high for regular flaring and suggests a strike or emergency flaring.
It was still bright two hours later.
I shorted NVDA.
Why markets are looking dicey, and where my mind is at right now. xitter.cf/i/broadcasts/1NGaroLjw…
Hope you read my free research on $KSA.
Right? RIGHT?
Sam Kovacs retweeted
A few people have been eager to critique my investment views without bothering to look at the record.
So, for the record:
Fidelity Overseas Fund: +27.5% annualized vs. +19.5% benchmark
Teton Partners: +12.6% annualized vs. +7.8% benchmark
Gyrfalcon: +10.3% annualized vs. +4.2% benchmark
That’s not a backtest. That’s an investment record built over decades, through very different markets.
Not 18 months, instead 45 years.
And yes, NOPE was a disaster. I blew it.
I’m always happy to debate ideas with people who have done their homework.
For those who prefer cheap shots to due diligence, here are the numbers.
When I see these calls for $300-$400-$500 I ask myself what is required for this to be possible?
Massive debasement of the USD.
So then it is possible. Although I'm not calling this.
NVIDIA'S 3 TRIGGERS:
1. Today vidia's 1st warning sign flashed red.
2. As Livermore reminds us: As the leaders go, so goes the entire market. If you cannot make money in the leaders, you are not going to make money in the stock market."
3. A lot of this markets leaders have turned, but not Nvidia, not yet.
4. Nvidia has added over 4tn in market cap throughout this bull run.
5. As long as it hasn't turned, this market ain't over.
6. It is currently in a rising wedge within a rising wedge, with its 200 day moving average just below.
7. Rising wedges show buyer exhaustion, each thrust shows less enthusiasm.
8. Today it just closed below the lower one at $211.
9. My baseline is now for it to meet its 200 day moving average at $203.
10. If that doesn't hold and it closes below $200, it's game over.
Trigger 1 is the small wedge, Trigger 2 and 3 the larger wedge and the 200 day average.
Below those, you're in trouble.
This move might be benign, I opened a short just before the market close, with a tight stop loss at $220.
t could easily whipsaw here and hold the market a little more. But given the way things are taking place, I want some skin in the game to track this.
Will update over coming weeks
To read more of our latest portfolio updates, check out my latest write-up:
babylonburns.com/p/the-babyl…
BRO I"M SCARED FOR THE MARKETS RN
One of the big reasons I'm worried is George Soros's theory of reflexivity.
The basic idea of reflexivity, if you don't know it yet, is that not only humans influence market prices, but market prices influence humans and businesses at large (let's say human systems). For instance, the share price goes up, so you can issue more stock or refinance your debts, which allows you to secure your business's continued operational smooth sailing.
So. Why am I afraid?
I'm afraid because oil prices are now as high as they were in the first spike.
Decision makers who have to choose whether or not they're going back to war might be inclined to think:
"Well, the price has already increased as if we were going back to war. Might as well do it."
In that sense, it is not the fact that we are going to war which is causing the price to increase. It's the price of oil that is increasing that is causing us to return to war.
Now it might be Friday, and I might be overworked and under slept, . This might be castles in the sky, but this is what's on my mind right now.