Design a site like this with WordPress.com
Get started

Category: Uncategorized

Dave Portnoy is playing the media like a fiddle

For those of you who don’t know, Dave Portnoy is the CEO of Barstool Sports, and has taken on the persona of Davey Day Trader since sports were cancelled in March due to coronavirus.

Dave’s an avid sports fan and sports gambler, and trading stocks have given him and many others an outlet as the sports world is put on hold.

Now that Dave has gone on a winning streak, he’s called out the likes of those in the FinTwit community, including calling Ross Gerber a “SIMP” and Warren Buffett “washed up” and an “idiot”.

At first, financial media thought what Dave was doing was pretty cute. Fast Money would have him on their program and their panel of experts would give Dave advice on stocks.

But now they’re fed up with him. Interviewers appear to be defensive. Portnoy continues to remain brash as long as he continues to make money in the market.

What the media doesn’t realize is that they are being PLAYED by Portnoy for millions of dollars in free publicity.

And you know the sad thing?

This is the same playbook that Trump used to get free publicity through his 2016 campaign. The media believed there was no chance Trump could beat Hillary, so they built up Trump as the candidate so they could rag on him every time he said something stupid. Then he won the election and it wasn’t quite so funny.

This was the same playbook used by Lavar Ball to get free publicity when his son Lonzo Ball was at UCLA and getting drafted by the Lakers. Lavar was building up his own brand, Big Baller Brands, and leveraged media attention to try to monetize this idea.

He used his son’s hard work and accomplishments to push his own thing. It only ended once Lonzo Ball rolled his ankles multiple time in Ball Baller Brand shoes causing him to switch over to Nike, and suing a former brand partner.

The media gets played so hard. They fall for these electric, brash, loud personalities who say whatever is on their mind. Then they get defensive and attack when those loud people don’t do what they want them to do.

That’s what’s happening with Portnoy. As he continues to brag about his stock market gains, financial media and those in the financial space grow more and more resentful of the man.

Thing is, Dave doesn’t care about making money in the market. Once the world goes back to normal, and sports come back into our lives, Dave will go right on back to running Barstool sports. Except now the Barstool sports brand has been exposed to tens of millions of people who may not have otherwise heard of them.

So, financial media, you are being played. You fed the beast, the beast has become bigger. Now you are upset that Portnoy is making a joke out of the financial industry.

To the mainstream media in general: you get played so hard repeatedly, and you don’t even realize what is going on. While your attention is on Dave’s trades, he’s busying enjoying all this free publicity at the benefit his brand.

Don’t like it? Stop giving him attention. That’s it.

Advertisement

Back to work here…

Hello friend!

I’m back to working on this blog starting this month.

This is what I’ve been up to

The months of February and March were crazy with the coronavirus and its impact on the market. I was busy most of the time in these months trading, documenting, programming, and continuing the improve and refine my trading processes.

2018 (with emphasis on the last three months of the year) was extremely rough for me. I fought the Fed multiple times on trades and I lost. I was actually looking for jobs in January and February because I wasn’t sure I’d be able to continue trading.

That changed, fast

Volatility in the market took off. I held short positions that profited insanely. Negative gamma had proven to be my ally. Convexity won out.

This extended my runway another 4-6 months at a minimum. It’s been a scary ride but I’m loving every minute of it.

What’s to come

Anything that I’m interested in. I’m currently interested in the following things, in no particular order.

  • Understanding gamma exposure deeper
  • Other options greeks and their effects on markets
  • Higher order options greeks (vanna and volma)
  • Game theory
  • Kelly criterion and position sizing
  • The rise of the carry trade
  • Federal Reserve operations
  • The current state of the economy
  • The current state of politics in the world
  • Python programming
  • Calculating gamma exposure from easy to obtain information
  • Building trading dashboards

That’s just a few I can think of off the top of my head.

Follow this blog to stay updated.

On the Agenda – December 22, 2019 Update

As you can see, I’ve posted many more articles on gamma exposure and repo operations. My goal is to continue to build out these topics and address more questions that you have on these subjects. (Let me know questions you have along the way and I will address them in future articles.)

I also plan to write more about Python for finance, and how I use it day-to-day to help facilitate my trading.

Stay tuned.

The World Has Gone Mad – Ray Dalio article summary

We are currently “pushing on a string”, a phase which Ray says we have never seen during our lifetimes. This is the situation where investors are flush with cash, and would rather invest it, not spend it.

The prices of financial assets have gone up as interest rates have plummeted. Low expected returns aren’t just driving up the prices bonds, but also equities, private equity, venture capital, etc.

Startups don’t have clear paths to profits, so they rely on selling dreams (Adam Neumann WeWork is a prime example) to get people to invest in their ideas. Investment managers are sitting on large hordes of cash and are looking for any place to park their funds, hence the overblown valuations of companies.

Government deficits are large and continue to grow. As a result, governments must sell more debt that nobody is interested in buying because the interest rates on these debts are so low. Central banks end up buying this debt by printing new money. (But don’t say they are monetizing the debt).

Down the road, as pension and healthcare liability payments come due, those obligated to make these payments will be unable to do so. How does this happen? Those institutions have expected returns of 7%, much greater than expected returns in the market in the coming years.

As these institutions are unable to make payments, unfunded liabilities will balloon as a result of suppressed growth. Teachers and governmental employees are those most exposed to this risk.

In sum, money is basically free (because of low to negative interest rates) for those who have money and creditworthiness. Money is unavailable for those without money or creditworthiness.

This contributes further to the wealth gaps we see today. Technological innovations are creating a way for companies to cut jobs further as well. The effects of low interest rate monetary policies are no longer “trickling down” to workers as a result. Thus explains how to we got where we are today.

A Place for Scrap Notes and Scattered Thoughts

I will blog more often than I have in recent months.

The reason I haven’t blogged as much: I didn’t know what to do with this blog.

Until now.

I plan to use this blog as a place for scrap notes.

I plan to post thoughts and ideas that I come up with in the moment, and won’t focus so much on refining every piece of content I create.

A perfectionist fault

I try to make everything I create great. This prevents me from sharing many of my ideas as a result.

When I don’t have a fully formed, well-thought out observation, I don’t like to share it online. That’s why this blog is changing.

I want to get content out there as a means to force me to get comfortable putting content out there. It won’t always be pretty. It won’t always be polished. It won’t always be completely thought out. But it will be a place for me to document.

Every piece of content doesn’t have to be perfect all the time. This is a start.

I’m always learning

I like the put predictions out there for the purpose of learning.

I don’t want to be seen as some prophet, because I’m not. I’m wrong a lot of the time.

My goal is to put predictions out there so that I’m accountable for them. One effective way to find out your biases is by putting things out there to be scrutinized.

Your scrutiny, insights, or questions are encouraged because I know they will help me (and probably you as well).

Cheers,

Court

What I’m working on

Lately I’ve been working on creating a report on my trading in my portfolio that I can run using a Jupyter notebook. The code is written in Python.

The purpose of the report is to give me a summary of my portfolio, and how much I have positioned in various stock options. It’s broken down by the different tickers, option types, expiration dates, so on and so forth.

The purpose of the report is to make it easier for me to see where I’m positioned in the market. This allows me to make better decisions I’m sure that I am following those trading rules that I said set forth for myself.

Hedging

One part of hedging is that you need to make sure positions are balanced out in some manner. If the market moves significantly to one side or the other, you want to reduce the significance of the adverse effect on your portfolio. That much is known.

What ratio, type of option, days till expiration of option, and so on and so forth have to be figured out. That’s what I’m working on doing right now. That’s why I created the report. I want to be able to analyze past trades based on the different criteria. I also would like to apply different machine learning techniques to the material down the road. So that’s what I’ve been working on.