A Chinese Frankenstein, Fallen Angels, And A Pitch To Buy T-Note

Chart I’m looking at —

I’m considering buying 5yr Treasuries here for a punt. Short positioning is stretched and from a technical standpoint, it looks like price really wants to rise (yields down).

This chart offers a good R/R for an entry with a tight stop. I think it runs to at least its 50ma (red line).

Podcast I’m listening to —

This week I listened to the Capital Allocators podcast with guest Ben Reiter. This interview was so so good. Ben Reiter is a writer for Sports Illustrated and the author of Astroball: The New Way to Win It All. He’s the guy behind the 2014 SI issue entitled YOUR 2017 WORLD SERIES CHAMPS; a crazy prediction (the Astros were one of the worst teams in baseball) that ended up becoming true.

They talk about how big data and statistical analysis are evolving the game of baseball. It’s like Moneyball but on steroids with teams now analyzing all types of esoteric data in order to try and gain an edge. And the secret sauce that made the Astros so successful was their use of qualitative data (input from seasoned baseball scouts) on the intangible things that separate good players from great ones.

The discussion might as well have been about markets and investing — there are tons of parallels. Definitely check it out, it’s worth a listen. Here’s the link.

Trade I’m considering —

I’m closely watching a list of “fallen angels” which are great companies / value stocks that have fallen 30+% over the last few months. All great stocks go through periods of large drawdowns like this and it’s healthy, just as long as the business fundamentals are still sound (which they are for each of the stocks below).

These large pullbacks are the result of profit taking which leads to momentum and trend followers exiting, which eventually drives the stock down to a point where value investors come back in and scoop it up. Then the process repeats.

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Disclaimer: All statements are solely opinions and are for educational purposes only.

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