Macro Dragon: Synthetic Fridays & Arbing Wkds... Macro Dragon: Synthetic Fridays & Arbing Wkds... Macro Dragon: Synthetic Fridays & Arbing Wkds...

Macro Dragon: Synthetic Fridays & Arbing Wkds...

Macro 2 minutes to read
Kay Van-Petersen

Global Macro Strategist

Summary:  Macro Dragon = Cross-Asset Daily Views that could cover anything from tactical positioning, to long-term thematic investments, key events & inflection points in the markets, all with the objective of consistent wealth creation overtime.

(These are solely the views & opinions of KVP, & do not constitute any trade or investment recommendations. By the time you synthesize this, things may have changed.)

Macro Dragon: Synthetic Fridays & Arbing Wkds...


Top of Mind…

  • As some of you may know, we have elections here in Singapore tmr hence its going to be a public holiday. KVP will be arbing that over Mon, to catch up with loved ones (& maybe even some family members) plus some side projects. So we are likely not back with the Macro Dragon until Tuesday… everything else being equal
  • Macro… macro… macro… takes longer than you think & you almost drive yourself crazy talking about prime conviction theme…. Then next thing you know gold is above $1800… we have not even started to move in the precious metals complex yet imho… we will be get strings of back to back days, of the likes of gold popping by +$25 to +$50 a day
  • If you did not catch yesterday’s Saxo Market Call podcast that comes out in the European morning, please do so. Our equity strategist Peter Garnry held the fort & had a special guest talking about an interesting contingency Phase-One deal break scenario…
  • …which with USDCNH south of the pivotal 7.00 handle, as well as CH & HK equity names flying  - CH Airlines still lagging by the way, still down c. -30% YTD… whilst CSI-3000 up +14% YTD in-line with Nasdaq-100 - could make for an interesting risk-off tactical shorting to strategic buy-the-dip opportunity
  • A lot of folks out there are not clear on the regime we are in… if you don’t know what regime we are in… you need to stop right there & either figure that out first… or even better outsource it to someone that lives & breathes it every day - & trust KVP, its far from a walk in the park for them…
  • …or for the USD bulls… as the DXY at sub 96.50 (the c. 200WMA) is showing that the dollar bearish downside trend (Another Dragon Anthem) continues to be very much intact…
  • Speaking of far from a walk in the park, you will be shocked how few people really understand asset allocation (AA)… be they finance “professionals” like HF & AM managers, private bankers & wealth advisors, to family office & UHNW investors, to even value folks… KVP could do a book on this… but he will not… there are so many holes in people thinking…
  • Likely one of the biggest is approaching every investment opportunity with the same risk-reward framework… everyone is trying to optimize the highest return for the lowest risk. Afterall that’s what the text book says & intuitively it makes sense right?
  • Wrong!
  • Again context is everything… you have to think of AA from an overall wealth distribution basis, as well as the objectives & parameters of the tranches of those distributions.
  • Here is a simple question, KVP gives you $100m to invest as portfolio manager at his family office (Upside Capital), What is the best allocation below?

    1. 100% into Equities
    2. 100% into Bonds
    3. 65% Bonds, 35% Equities
    4. 20% Bonds, 20% Equities, 20% Gold, 20% Commodities, 20% Currencies
    5. 50% passive all weather portfolios, 50% Active HF Allocations
    6. 100% Bitcoin


  • If you chose 6, 4, 1, 3, 5 or 2 – you are wrong. Because you don’t have enough information to be an optimal manager for that capital
  • Perhaps the family office has $1bn in total AUM, with 90% of that being in Amazon, or Bitcoin, or Beyond Meat or Yeti or Tencent or in a long Gold position or short USDNOK position. Does the family have capital commitments that need to be funded out of the AUM, or is it capital infusions of +$25m a quarter?
  • You need context, as that gives you parameters & objectives to work under… otherwise you have already failed before you have begun. Or at best, are just massively under-performing from your true potential of consistently compounding wealth  
  • You cannot approach your bond allocation how you would approach you bitcoin allocation – yet people do this all the time… it used to drive KVP up the wall… no longer. This. Is. GOOD. 




To Keep In Mind Today

  • JP: Machinery Orders, Money Supply
  • NZ: ANZ Bis. Conf.
  • CH: CPI 2.5%e 2.4%p PPI -3.2%e -3.7%p
  • EZ: Euro-group Meetings, GER Trade Balance
  • US: Jobless Claims, Inventories, Natural Gas Storage, 30yr Auction  


Start-End = Gratitude + Integrity + Vision + Tenacity. Process > Outcome. Sizing > Idea.

This is the way 



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