Ironshell Capital

(Just to rile the haters) So a few weeks ago, I shared an UHNW-only ISG Outlook doc from Goldman regarding where to position short-term money for Q4 with the kids over at @IronshellCap. Long document but the TL:DR was "buy shoes". Those guys scored a double on rubber footwear today. Could I have shared it here? Sure. But the haters should have a poverty Christmas, and that won't happen if I help em out covering for their awful takes. It's always the quiet groups that ultimately do the best. I can almost guarantee you these were the only guys playing frigging $CROX on FinTwit (as it were). But go give Mike Alfred $219 a month to lose you 30% since June :P.

An example of needing to look deeper into numbers: So this morning on The Diner w/ @NHAunleashed, at one point we got to talking about what a difficult few months this market has been overall and how I suspect very few people have been able to navigate it well and how I largely sat it out. I decided I wanted to dig deeper on this because, at a 2-second glance, August didn't LOOK like a difficult month - the S&P gained 2.7%, The N100 was up 4.2%, and breadth LOOKED strong across megacap and small caps. And this is why looking deeper is important. August was a low index volatility, high individual equity volatility month. While the VIX fell from 16 to 14.92 and closed at near its lowest level of the year (which indicates a calm tape), the spread between $VIX and the CBOE constituent voaltility index ( $VIXEQ) hit an all-time high of 34.14 points. So you had individual equities at extremes while the index vol sat at a yearly low. Further, implied correlation was near the bottom (CBOE 1-month index was at ~10), meaning you had names within sectors moving independently rather than in unison. As if that weren't enough, sector dispersion widened by a huge margin - Energy 7% against Utilities -4.8% in the same month. In layman's terms you had breadth coming to a bottom while indices were at all time highs, sector rotations weren't operating in parallel, and the VIX at lows. I promise you, there's not a book or video out there that prepares you for or teaches you how to navigate that, because it shouldn't happen. That is the literal definition of difficulty dialed to 11. Buy and hold investors didn't even notice August. Active traders, I promise you, got mauled by it. Even Non was talking about (remember, he likes to sell contracts against equity) how a bunch of his positions sold ended up going the wrong way and him needing to either make the choice to buy them back and take the hit to get it back later or let the equity go. Even that safe strategy was failing in August. I've got access to an enormous amount of trading communities by virtue of everybody wanting me to give them a shoutout when this account started taking off a few years ago where I just went in, looked for a while, and largely either never said anything about them or tore them apart. I've got all the prominent names you see here from KC to Evan to Paper, Kevin to Quinn, Charlie to Mason etc. I'm gonna have my agent go through them tonight and look at their performance for the month. I think it's gonna be interesting, and I have a sneaking suspicion the numbers are going to be very bad for almost all of them. TL:DR: If you got chewed up in August, I'm actually not gonna dump on you too hard - you'll have had plenty of company. This is the result of the Chaos Administration - pray that November adds sweet, sweet gridlock to the equation to normalize things.