EXODUS QUANT DID IT AGAIN: SEE HOW I KEEP CRUSHING THE $SPY

Some of you are really smart, but at the same time extremely dumb and lame. Your skills aren’t transferrable and your methods cannot be passed onto your children. If your investment process isn’t repeatable, it isn’t relevant, and it certainly isn’t desirable for investors who require a methodology to place stakes.

Machine learning is going to ravage the Investment Advisory industry over the next two decades, especially displacing those who refuse to use tech to manage their investments. Gone are the days when an advisor can simply show his clients a bunch of useless charts and get money to invest in those dog-shit stocks with fleas.

Money is to be managed with a plan, a process that is measurable and could be passed onto future generations.

This is exactly what I am doing in Exodus Quant — and I am happy to announce we fucking ripped off the skull of the S&P 500 and ate its brains this month. It was a meal that was as delicious as it was grotesquely violent.

Here was the portfolio for May.

This portfolio yielded a return of ~4.5% — 230bps better than the SPY.

We’ve beaten the SPY every single month of the year and will continue to do so — because it is a better process — rooted in logic and fundamentals.

My new portfolio will be published inside Exodus tomorrow morning.

Before

After

Canada’s President, Trudeau, said US tariffs were “totally unacceptable” and issued his own set of taxes to be levied against US products. Over in Europe, they did the same and I’m sure down in Mexico too. It’s the greatest nothing show the world has ever known — men clad in burlap outer garments trying to act tough, but in reality they have zero aircraft carriers.

The United Steaks can literally wipe Canada off the face of the planet, occupy all of Europe and force them to speak our brand of English, especially during business meetings.

I suppose some people are concerned about the tit for tat nature of these tariffs, but I’m not. I’m sure this is more Trumpion economics, the proverbial art of le deal. Very soon, Mr. Donald Trump will appear glowing from this blessed grandeur, a negotiating machine, inking new deals — saving the American people billions. People throughout the world will like it too, because a good deal is good for everyone, right?

This being the last day of May, let this serve as a reminder. Tomorrow the Exodus Quant portfolio gets an adjustment. For the month of May, returns looks to be at ~5%, sharply crushing those of the SPY. For free trialers wanting to join the league of gentlemen and become a proper paying customer, pleas wait until your trials have expired.

All in all, today was a fine day to eat sandwiches and ignore the market. I stepped in and bought SMAR and that worked fine. Maybe tomorrow I will sell BITA, once it gallops above $30. We’ll see.

I don’t give a shit about market drawdowns — Italian elections, or anything else for that matter. I’m gonna make money regardless, or as some of you absolute morons like to say ‘irregardless’, and that’s all there is to it.

I added a third SAAS stock to my active portfolio, buying new issue SMAR.

Software sales is the new boiler room. Lots of money to be made there.

Prove me wrong.

Morning lads

I saw futures plunge and European markets fall in tandem and began to worry about those god damned Italians again. But then I looked at Italian bonds and saw they were rallying, offering me a well deserved sigh of relief.

Then I got curious about the drop in the DAX and all of the recent chatter around DB — a fucking stock down more than 45% this year, and voila — I found the news.

It was already a terrible week for Germany’s largest bank, when the Italian turmoil sent its stock price below €10 for the first time since the bank’s existential crisis in the fall of 2016, and it just got worse this morning, following reports that the Federal Reserve has designated Deutsche Bank U.S. operations to be “troubled condition” which the WSJ said was a rare censure for a major financial institution and is being reflected in its price this morning, which is now down over 5%, at €9.35, and rapidly approaching the all time low of €8.834 hit in September 2016 when speculation was rife that Germany would bail out Europe’s largest lender.

As the WSJ reports, the Fed’s downgrade took place “secretly” about a year ago, and hasn’t been previously made public until today.

In short, the Fed put DB on their ‘to worry about’ list last year and revealed it today, so now everyone is running around with their hair on fire. Please. Buy stocks.

Gains in the euro have dissipated and the Dow is off almost 100, the Nasdaq is higher. While DB is a horrible bank with fraudsters at the helm, only interested in bonuses, I do not think their $50 trillion derivatives book blows up today. Higher rates doesn’t help — but last time I checked — German 7yrs are in NEGATIVE territory, so higher rates isn’t really an issue in Germany.

Is it?

In today’s edition of fake news, Trump apparently told France’s Macron that he was going to stop those pesky Mercedes Benzes from driving down 5th avenue, implying he’d slap the shit out of Germany with tariffs.

The catamites at CNBC are quick to disseminate.

President Donald Trump is preparing to block German luxury carmakers from the U.S. market, according to an exclusive report by German magazine WirtschaftsWoche.

Citing several unnamed U.S. and European diplomats, the weekly business magazine reported that Trump told French President Emmanuel Macron last month he would maintain his trade policy with the aim of stopping Mercedes-Benz models from driving down Fifth Avenue in New York. The report didn’t give any further details on what polices would be used to effectively ban the premium carmakers.

The report comes less than two weeks after the U.S. Department of Commerce launched an investigation into automobile imports to determine whether they “threaten to impair the national security” of the U.S. That could lead to tariffs of up to 25 percent on the same “national security” grounds used to impose metal imports charges in March.

Europe’s autos sector was trading lower shortly after the report was published Thursday, with German automakers leading the losses during mid-morning deals. Shares of Daimler, Porsche and Volkswagen were all trading off around 1 percent on the news.

Volkswagen was not immediately available for comment when contacted by CNBC Thursday, while Daimler refused to issue a statement.

The White House did not immediately respond to CNBC’s request for comment.

In other news, Trump is also crushing the people of Mexico and Canada, by imposing evil taxes on steel and aluminum. It is widely rumored that both nations will need to find other things to do with their time now, such as farm for maple syrup or make pinatas in the shape of donkeys, in order to make ends meet.

The United States is likely to impose steel and aluminum tariffs on Canada, Mexico and the EU Thursday, according to a source familiar with the decision.

The source, who preferred to remain anonymous due to the sensitivity of the situation, said the tariff decision is coming this morning and is “99.9” percent done. The U.S. expects the EU will retaliate in due course.

Metal producers in the countries affected had been granted a temporary exemption from the tariffs earlier this year, but they are due to expire Friday.

The tariffs were originally announced on March 1 when President Donald Trump said that the United States was being treated unfairly.

“People have no idea how badly our country has been treated by other countries. By people representing us who didn’t have a clue,” Trump said, arguing that trade trends “destroyed” American steel and aluminum industries.

On Wednesday, a trade delegation led by U.S. Commerce Secretary, Wilbur Ross, met with European Union counterparts in Paris but those talks appear to have failed.

Prior to the expected announcement, the French Finance Minister, Bruno Le Maire, said Thursday that Europe would take “all necessary measures” to respond. The EU has previously said it will impose its own tariffs on U.S. products such as motorcycles and jeans.

Also, Morgan Stanley downgraded MU this morning — because they have no idea what they’re doing and wanted some press.

Nasdaq futs are +10, WTI -1%, Eurostoxx 50 +0.4% and the Euro is +0.3% — because the Italians have been put in their fucking place — back in the kitchen and the garden, where they belong.

I didn’t know him in real life — but I knew him here and inside the Pelican Room, where we had great times — swashbuckling thru these markets like pirates on a ship with a motor engine and Gatling gun. Regrettably, I was informed today he succumbed to cancer yesterday, a battle that he informed us about when he was diagnosed in February of 2018. First it was lung cancer, then brain — never did he utter a word of negativity or complain about his situation. God knows, had it been me, I’d be miserable and paralyzed from fear of the future.

But DMF was a different type of man and I liked him immediately. He emailed me a few times, excited about his trading success — hoping to do it full time. For most people, trading full time is a recipe for disaster — but I really think he could’ve pulled it off. Anyone who saw him trade in Exodus knows how good he was.

This post is the very least that I can do for a man who gave so much to our little community here. For whatever reason, he gravitated to me and the site and was a distinguished gentleman since 2016 — crushing trades the whole time. He was definitely one of the best traders in there and his contributions and positive demeanor will be sorely missed.

He contributed nearly 2,000 comments inside Exodus (sorry about the hyper links, it’s hard coded into the site whenever I write the word) — all of them professional, serious, and sometimes with a little well timed humor. If his children ever google their Dad’s name, David M. Flaherty, I want them to know he was a joy to have around and was a really good man. Everyone liked him.

Here are some comments I lifted from The Pelican Room from DMF that I thought you’d enjoy. RiP David.

His last comments inside The Pelican Room.

TGIR’s tribute to DMFracer hits the nail on the head.

Last but not least, and this is what I’ll remember him by from his time with us: HE FUCKING ESCAPED THE WRATH OF XIV and was able to avoid disaster, unlike myself and many others here.

See you on the other side brother. I hope you’re enjoying some boat drinks right now.

No one went to jail for the financial crisis. Barely anyone committed suicide. Rules were put in place to prevent it from happening again. Now those rules are being raped.

Welcome to Planet Goldman.

The Federal Reserve and other U.S. regulatory agencies proposed Wednesday to revise the Volcker Rule to apply to financial firms based on their trading activity.

“This proposed rule will tailor the Volcker rule’s requirements by focusing the most comprehensive compliance regime on the firms that do the most trading,” Fed Chair Jerome Powell said in a statement. “Firms that do more modest amounts of trading will face fewer requirements.”

The Volcker Rule was proposed during the financial crisis in an effort to prevent banks from speculating in markets. The rule went into effect four years ago and generally prevents banks from trading for their own profit or having stakes in a hedge fund or private equity fund.

Wednesday’s proposal allows banks to have stakes in those funds in order to hedge risks for customers that aren’t banks. The financial firms would also be able to trade for themselves on a limited basis, under the proposal.

To determine the level of necessary compliance, the proposal divides banks into three categories. Those with trading assets and liabilities of at least $10 billion would need to comply with the strictest rules. Banking entities with trading assets and liabilities of between $1 billion and $10 billion would be subject to “reduced compliance requirements and a more tailored approach.”

Firms with less than $1 billion in worldwide trading assets and liabilities would be presumed compliant with parts of the rule and not have to demonstrate compliance.

The proposal also said trading desks reporting an absolute daily net gain and loss for the past 90 days not exceeding $25 million would be presumed compliant with the prohibition on proprietary trading. “The banking entity would have no obligation to demonstrate that such trading desk’s activity complies with the rule on an ongoing basis.”

“All of that is to say, I view this proposal as an important milestone in comprehensive Volcker rule reform, but not the completion of our work,” the Fed’s vice chairman for supervision, Randal K. Quarles, said in a statement.

This is not a total revocation of the Volcker rule — because that would be scandalous and hard to explain to financial reporters. It is a backdoor to looser regulations, a precedent that will eventually pave the way for no regulations and Goldman Ballsachs trading like demons in an effort to self-aggrandize themselves — lavished with exorbitant bonuses.

Last week I doubled up on BILI because I knew it was trading higher. I knew it like a marksman knows he shot you in the ear, or how an ace pitcher knew he hit you in the helmet with his fastball on purpose.

With markets up 300 and the Italian people in EU prison, I like my chances pushing the envelope here with these SOY BOY stocks.

With BITA breaking resistance at $24, I gracefully and violently stepped in and bought MOAR.

I cannot be stopped. Fuck the Stock Gods. I’m in charge now.

NOTE: My $IQ is fucking soaring, as well as my SHAK.