Trading Parabolic Moves (…after the fact)

There is nothing like a story of extraordinary gains to play havoc with investor psychology. Especially when it is founded on asset price moves of a magnitude that could mean life changing levels of profit – if you had only participated in it. Such parabolic irrational exuberances, that drive prices and valuations to unsustainable extremes, happen…

There ain´t no Secret

There is no secret trading or investment strategy, that will beat all others.   There are many ideas that work and related ideas all have very similar characteristics, leading to virtually the same risk-adjusted return over time across strategy types. For example (average data from my backtests, books, articles, academic papers etc.): Trend following strategies …

Isn´t it obvious? Switch from Bitcoin to Uranium.

How to constructively integrate speculative ideas in your portfolio. After making several thousand percent on your money in cryptocurrencies, the one thought on your mind is: „How can I do that again?“ Wild feelings are running amok, but recent signs of a bitcoin top may suggest looking elsewhere for crazily volatile speculation. Bitcoin daily price January…

The Yin and Yang of Financial Markets

It´s hard to strive for superior investment returns – many say it´s futile, because markets are too efficient. While researching for ways to gain an edge and to exploit systematic inefficiencies in the market, I came across the same pair of principle forces in different forms again and again. Mean Reversion and Momentum These pervasive…

Bear Market Preparation

It sure feels good when the value of your portfolio is rising on an almost daily basis. But, when virtually all assets are going up, that achievement isn´t exactly magic. A rising tide lifts all boats, as the saying goes, and it will pay off in the long run to keep in mind how we…

Are Cryptocurrencies on a similar path as the Internet in 1999?

Opinions on bitcoin and cryptocurrencies usually are very binary: cryptocurrencies are about to take over the world and the sky is the limit for valuations (sometimes with a caveat about nonsensical ICOs) cryptocurrencies are a fad and what we are seeing is the greatest bubble since internet stocks in the late 1990s Often smarter commentators…