Not completely hedged as portfolio still susceptible to momo driven reversal, given shorts on high momo names like $PLTR $TSLA $NVDA. Momo shorts only hedged by the $HOOD long (a momo stock too).

But given my bearish bias, I think it’s fine. Willing to take a little risk here and will cut momo shorts quickly if incremental info proves me wrong.

https://x.com/bobeunlimited/status/1907377416286122417?s=46

Pretty good thread; my view aligns w it

10% flat on all countries
20% on EU
34% on China
>20% for major allies

30Y US Yield falls to 4.5%

First glance, market likely worried about trade war spurring a recession. Flat rate lower than expectations, but China is surprisingly high. EU & allies may cave to a certain extent, but China.. maybe not.

Will have to see move from China & major allies/trading partners next, but what’s impt is that this creates another short catalyst (China & Other’s retaliation) rather than making Liberation Day a clearing event for uncertainty.. staying bearish for now. Revisit in the AM

$LULU down -7% on this news also affirms trade war with China/major trading partners, and recession worries are the main focuses of this announcement.

$BABA getting hit -5% as most direct line of sight for US investors, but I think market’s got this wrong so will remain long on the name.

Taiwan 32%

U.S. fabless players gonna be hit like Pearl Harbour

Post Mortem:

1) The most striking thing about this, was that Trump admin knew what it was going to do to markets; and still did it anyway. That alone should inform us on Trump 2.0 != Trump 1.0, not what the market had hoped.

2) Tariffs, if implemented as they were announced, would definitely result in a global recession. SPX only closed -2.7% yesterday (which I believe does not capture the full magnitude); another sign that the markets are still in denial hoping for sense to prevail.

3) The uncertainty of these on-and-off tariffs make it almost impossible to run a business and make long-term plans for growth, which in itself creates a feedback loop of cutting investments and drives a recession. To off-shore from China, many companies incl. $LULU shifted supply chains to Vietnam. Trump then hit VN w a 46% tariff. 46% cost increase for T-shirts -- either margins compress by almost half, or you pass it on to the consumers.

I think the portfolio did relatively ok due to the short hedges, but could be much better obv. given our bearish view from the start. I would still stick w my long/short choices. Live and learn! May take off some longs tonight in light of these tariffs.

Also to note, the U.S. 30Y is finally starting to cave. This has been one of the stated objectives of the Trump admin since the very start. The market is finally, tho slowly, starting to believe in Trump 2.0’s words, and an increased probability of a recession.

Seems there’s a carve out for semis. Fabless safe for now

https://youtu.be/3y7XwBcdg_0

Good watch

The aspect I like most about markets is that at its rawest essence, it’s just a collective of human participants, and hence psychology. Human psychology never really deviates, all throughout history. Hence, using history to think about the future is a good hack in navigating markets.

On second thought, just closed $BABA long. Don’t like the potential unknowns in this trade war, and negative binary outcomes if Taiwan issue comes up.

Short $AAPL @ $207.3, $NKE @ $59.06

Capping short exposure here and will see how the rest of next week progresses. Think our shorts have done their job in hedging out a significant % of risk the past week, I am happy with trimming if the situation turns.

This market is addicted to dopamine and hence very prone to squeezes fuelled by dip buying. This makes shorts very hard to manage. If squeezes happen, imo it’s better to cut the shorts early to try and get a better price later on (if you’re still bearish on the longer time frame)

Closed $LULU short @ $245.5, $NKE short @ $57.65

I think these stocks have fallen enough and may see squeezes. Also think VN will be one of the first to nego a trade deal given how impt U.S. imports are to them. And that Trump doesn’t actually want low-margin manufacturing (T-shirts, shoes) back in America, so more incentives to accepting a deal.

Shorted more $AAPL @ $207 and $TSLA @ $266

One last impt point on the reciprocal tariff rate: it is some weird calculation of (trade deficit/total imports * 100) relative trade imbalance of the counterparty, and not the actual tariff rate imposed on the U.S.

For instance, US has a huge trade deficit w VN due to the import of clothings etc. Hence the reciprocal tariff rate is calculated as 90%. VN does not impose a 90% tariff rate on U.S. imports.

This means 2 things: 1) it is significantly more complicated and harder for the counterparty to cave to the U.S., as doing so means they have to fix the trade deficit w US (?) -- where would VN get the $ to import goods (and what goods can VN buy?) from US to close the trade surplus? 2) this policy is less likely intended to be a negotiation quick fix (eg just bring down ur tariff rate and we will bring down ours), but more intended to correct US trade deficit w trading partners over a longer period of time — hence this tariff situation might take longer to resolve than current market expectations.

Just my 2cs

Shorted more $AAPL @ $206

Closed all equity shorts and longs and going long into gold ($GLD). Was contemplating between long duration bonds ($TLT) or $GLD, but ultimately decided $GLD as $TLT carries FX risk w $USD, which typically deteriorates in trade tensions. Also in trade wars, foreign investors may be less inclined to buy U.S. bonds.

Came to the reasoning that it’s not worthwhile to trade and squeeze out little gains in equity, given this admin’s disposition to on-and-off talks. Shorts are also hard to play, given market’s buy the dip tendency. It’s probably better to stay sidelined (which is also a position in itself) and regain mental clarity to be ready to buy the trough.

Some quality stocks I’m looking to load the boat, if NTM P/Es reach these levels. ~20% - 30% correction from here. Also impt to see if NTM estimates are too high at that point in time (if a recession does happen), if these P/Es are ever reached.

VST 8x
BLDR 8x
META 15x
NVDA 15x
CDNS 25x
TDG 28x
HOOD 18x

Preview for next week:

While we may see some mean reverting bounces driven by dip buyers next week, given that sentiments are pretty bad, I think for the most part, any rallies will not be sustainable and will be faded. The catalyst path forward for further downside includes Apr 9 and Q2 earnings.

I think a massive mispricing last week, amidst all the panic, was $DXY strength on Friday due to mass selling of risk assets into USD. If these tariffs hold, the USD’s reserve currency status, and thus value, is at risk.

USD as a reserve currency and large trade deficits go hand in hand. You can’t have one without the other. If manufacturing is indeed brought back to the U.S, and trade imbalance is restored, then there’s less need for countries to hold USD (and buy U.S. Treasuries), given lower trade with U.S. Without this artificial foreign demand for USD and U.S. Treasuries, the U.S. govt can no longer recklessly spend domestically due to lowered ability to finance their borrowings.

TLDR: If Trump is indeed trying to unwind this “normal” world order of an imperial tribute system of the world offering America cheap imports and borrowings while allowing her to essentially export inflation — the order that we have known since the 1970s, then the US economy is in for a lot more pain than is being currently priced in. It feels like the market is only pricing in temporary tremors, but if Trump is true about his stated intentions, it should be more like a structural tectonic clash.