frommi

Signal episode What happened within roughly 20 trading days Result July 12, 2024 COR1M reached its then-all-time low. The subsequent yen-carry unwind culminated in the August 5 selloff; the SPX decline from the signal area was substantially greater than 5%. Hit - 10% February 2025 — apparently around February 19 SPX peaked on February 19 and fell more than 3% during the following week; the decline continued considerably further during the following weeks. Hit -20% October 7, 2025 SPX suffered an approximately 3% intraday decline on October 10, three sessions later. The closing decline was approximately 2.7%. -3% - fail January 12, 2026, approximately COR1M again crossed the threshold, but SpotGamma subsequently said it reversed without a “meaningful vol shock.” -12% after 40 days May 29, 2026, inferred from the May 31 report SPX closed May 29 at 7,580.06. The lowest close through June 26 was 7,354.02, a −2.98% drawdown. The June 26 intraday low was 7,294.18, a −3.77% drawdown. -5% June 29, 2026–present A new episode began at 7.56 on June 29 and remains below 8. As of July 13, fewer than 20 trading sessions have elapsed, so the observation is incomplete. Open/ So maybe even 10% is a good target to shoot for.

No, i just hedge from May to October. I use 5% notional value of my portfolio and buy december puts on the DAX 5% out of the money. I buy at the end of april and hold to the end of october or when the DAX is down 20%, at that point the puts will be a 5 to 6 bagger so it covers all losses on the portfolio, assuming it draws down like the DAX. That worked well in 2015 and 2018 where puts made me money. Since than i lost ~4-5% every year, in 2022 it was just 1%, because the market moved down a little. In essence as long as the market tanks 20% in the summer every 5th year, the strategy will break even and reduce market drawdowns to ~0. New strategy for winter: I will use the backtested strategy of the option guy from the excess return podcast. At 41 minute mark he talks about it: In essence when forward https://www.investing.com/indices/cboe-1month-implied-correlation is below 8 i will put 1% of my portfolio in 6 week ATM S&P500 puts. He mentioned that after 20 days the market often draws down ~5% after such a signal so that is my profit target for now. But this strategy is new to me, so i need to see how it goes. I am also not sure about the profit target here, need to do some digging. And because the situation is so insane right now, i also started doing it last thursday, but that is just to test some waters outside of winter.

Thats the thing, i do this since 10 years and my drag was -2% with a 5% put position. Because there is residual value when you buy long dated puts (in my case i just use 6 of an 8 months put option and in 2015 and 2018 these puts printed some money). You can't assume that a put will never make money, thats not a fair comparison (in my case a 20% drawdown this year would lift the drag into positive territory)

assuming you make 15% on your active stock picks: 15% * 50% = 7% + 2% cash interest = 9% 15% * 95% = 14.25% - 2% drag for puts = 12.25% + better downside protection in bear markets With higher interest rates it might look different.

Somehow yes. What most people forget about put options is that they can also print money, its not that every option will expire worthless. I hedge constantly especially during summer months and while the past 10 years it has dragged down returns, holding 40-50% cash would have been far worse. Over the past 10 years my hedging was a drag of roughly -2% per year, and most of my hedging is buying a 5%(of portfolio) put position on the DAX in april (5% OOM, 5xprofit target, december expiration) and hold it too the end of october. And we didnt have a down year in summer the past 8 years, so i think -2% is very acceptable, 1 year of reaching the profit target will still be enough to wipe out all losses and give me cash when stocks are dirt cheap. It also reduces drawdowns much better than a large cash position, because even with 50% cash you will have material losses in case of a crash. The excess return podcast has an option guy, that advises to buy put options 4-6 weeks out when https://www.investing.com/indices/cboe-1month-implied-correlation is below 8. This is the price of a hedge, and at the moment its dirt cheap because nobody is afraid of a crash. Thats when you should be fearful, at least if history is any guide. For these shorter term options i would only buy 0.5-1% of the portfolio otherwise it can be costly over the long term, because options lose the most of their premium in the last 4-5 weeks. This is my plan for the winter months now, lets see how this plays out. I can't hold cash, its just not in my DNA

Couldn't stand the pain of reading bad earnings releases anymore and sold MTY Food Group.

Just found that GLM 5.2 is now also hosted in europe, costs only half of ChatGPT, and i prefer its responses over GPT 5-5. Very interesting to see how GPT 5-6 is compared to that. GLM 5.2 oneshots some answers where i need to repeatedly have to query GPT5.5 something like "check it again looks wrong" to finally get it right. https://lumo.proton.me/

Have a nice day!

I am using Chatgpt Pro right now with GPT 5.5 on High thinking mode and i am very impressed by what it brings up. It can create a whole investment thesis in 4-5 minutes that has little holes in it. So yes i am paying. I also developed the prompts for it using the model. Probably an even better value proposition for 20€ per month than any substack subscriptions. The free gemini model is good, but the frontier models are even better Lets see if that leads to better investment performance 1-3 years down the road. I am also more and more impressed by what Copilot is doing inside Visual Studio (i think it was using opus 4.8), yesterday i had a problem in a 10 million line of code base and it fixed a unittest on its own by changing some files from a little prompt that sounded like a crying baby, something like: My unittest is not working, must be something with loading the modules, fix it please and 3 minutes later everything worked.

But for how long when the revenue is not sustainable?

No? When you look at the current trillion dollar companies without Tesla/NVDA, you will find strong moats and recurring revenue.

Because there is no moat protecting these earnings. Barely any semi has a true moat. And the revenue is not recurring, when enough datacenters are built (and because chips are not the only bottleneck) the demand for chips will just stop, as it always has in history. Its a cyclical industry.

If this ruling stays, they are both toast. Open models have catched up and theres no real reason to pay for the expensive models anymore. If they are not allowed to publish frontier models, how should they earn money? If both of them don't fund the creation of new models who should step in? To me this is the clear bell ringing at the top for semis and the bottom for software.

RIP

EVO, CPRT, VEEV. Cheap valuation relative to growth/history and all have big buybacks and great balance sheets.

Whats your target price for SOXX in the next 3 months? These options look very expensive to me.

In the past few days i am thinking about how the digital euro (not wero) will change payments in europe and i can't see how MA&V +european banks aren't the losers of this. Why is this not priced into these companies today? Every merchant will try to get customers with bonus systems to switch over like it worked in Brazil and India and every merchant+bank will be forced to use/offer it. The merchant payment processors doesn't seem to be impacted because they can still earn their fees. Just Ayden will lose its interchange fee because it is also the bank, so overall i think that Ayden will probably lose the most of all the merchant payment processors in europe because for a merchant than the fees aren't material different to other payment processors?

No, i dont think thats likely. But its still cheap and the EPS will expand this year because the USD weakness has hidden some of the operational power (25% operating income growth this year). And 10-20% growth with a 3.4% dividend yield is always nice to have. Theres a thread about it.

more Adobe.

It is the largest component of IGV and i believe the whole ETF is shorted regardless of whats in it or at what valuation the stocks are, to buy more semi stocks. That trade will implode sooner or later.

Sold MDLZ,NOMD, DOM. I want to lean more into high growth stocks with great balance sheet and really great businesses in the future.

more Karelia Tobacco.

Looks like it was delayed to next week

Yes its liquid. Option strikes closer to the current price have a higher delta so they move less on volatity and more on the real price of the underlying. If you chose an option strike far out of the money, say 300$ in this example when vola is high like today for Adobe they are more expensive, so its quite possible that the stock moves up, but the option price doesnt move at all because volatility moves down. Thats why i typically chose ATM options. But when vola is very low it can make sense to go further out on the strike.

Just to try it again. We are ready in the SPY to move down another 40 points.