Same herd mentality, different soapbox.
Buying the assets once the markets had already collapsed, and they were undervalued, would have been more of a Warren Buffet thing to do.
1. The short trade (The Big Short or similar trades during the housing bubble) happened during a period of market euphoria. I.e. when most investors were irrationally confident and greedy.
2. Instead of sitting out or being fearful (as Buffett's original advice would suggest), the people who shorted the market took an aggressive position. They were indeed "greedy" in the sense of seeking profit, but they did so with deep awareness of the systemic risk that others were ignoring.
Anyone know how it is doing recently?
https://www.cnbc.com/2025/04/05/heres-why-dead-investors-out...
So on average they probably are not that good as they really need to do all the marketing. Which is actually quite big time commitment.
- Vix, IV vs realized/historical
- option flows
- market makers gex, skews, (1st 3 probably best src of edge)
- /NQ and /ES trading volume,
- bond yld curve, credit spreads, how much prim dealers hold after long auctions, PBC holdings
- metals
- geopolitical: Europe / middle East / China/ South America
- energy
- currency
- commodity prompt spreads, contangos
I consistently made good profits from it, but I had no real basis for setting trade sizes which I was never happy with-- if I could actually see commenters orderflow I could clone their sizes with scaling, but obviously I can't. I didn't resume the activity after the 2020 market turmoil particularly as I had a lot less time available and didn't have a good way to fully automate the practice.