Macro Dragon: Mental PnL... Macro Dragon: Mental PnL... Macro Dragon: Mental PnL...

Macro Dragon: Mental PnL...

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: Mental PnL...


Top of Mind…

  • This may seem solely one geared for the traders, yet the Dragon Clan understand that the principles of compounding wealth successfully over time, are symmetrical to the principles of living a successful life
  • To most traders, there is only one pnl… and that’s the one where at the end of the day, they know whether they are up or down… determined by the tape & their exposure… the padawans’ mind sets their temperament to the pnl… they are attached to it… the masters’ mind is open to everything, yet attached to nothing… the pnl is not the obsession… the process is the obsession
  • Yet there is another subtle & way more important pnl measure… & that is mental pnl… this worth at least 10x… but more than likely 100x… let KVP postulate why
  • You mental pnl is akin to what state are you spending the vast majority of your time in… are you open, positive & objective in your reasoning… are you driven by the right long-term principles of compounding money… are you staying focused on the process & systems… are your levels of energy & intakes high & healthy… are you playing devils advocate on your best ideas & being unbreakable in your money management systems, etc…
  • Or are you tired… fatigued… just not feeling it?…  are you operating more on emotional swings between fear & greed…. Sizing too small on the trades that are working & too big on the ones that are not… or are you harvesting your wins to aggressively, while letting your losses turn from small scratches to loses of organs & limbs… is you portfolio all skewed to work out over the next wk, month, quarter, year?... how many of your positions are truly independent non-correlated expressions of riding the market?
  • A poor state of mind is part of the process… its important to be abreast of… because just as one should not be decoding a nuclear bomb after a stressful day at the office/home… one should not be making executive decision or running extensive risk or sometimes any risk… when in a poor state of mind
  • The one best thing about traders… that they hold over investors… is they don’t need to have anything on. Investors by definition are default long equities & bonds… traders may clear & turn their books several times a wk… let alone over the course of a year. One can always get back in…
  • There is a caveman-old school mindset (imho) of grinding day-out & day-in… almost a masochistic pride in it (your reading from someone who once did 90 straight days of +16hrs days in IBD & loving it… & yes, social life was like negative ten thousand… )… yet the truth of the matter is… this game is about volume over time… not intensity at the cost of volume. Part of training is not training… part of work is not working… and part of generating money consistently over time… is not generating money all the time… Even Casanova put up his feet now & then…
  • Pick your spots… cultivate a lifestyle & environment (including who is in your inner circle) to raise the delta of being more in the zone… than out of the zone..
  • So in review, one of the most important things you can do, is be aware, of you. Are you hot or are you cold. Are you in a peak beautiful state or a poor state of mind. Are good to go with those executive decisions, or perhaps some meditation & yoga are in order, before you sleep on it… etc…
  • So… the point is… when your on point - mentally, physically & spiritually… you can literally generate hundreds of millions of dollars in the space of a very short time… did KVP ever tell you about +68% return on AUM in 4hrs… we’ll save that war story for another time… that trader was definitely in a beautiful state
  • Just as you would protect your house & clan, protect your mental pnl… it is a lot more valuable that all the wealth you currently hold, as it is a window into what you choose to see & seek. Which is why…
  • What you seek, is seeking you… Everybody gets what they want out of the market…


On The Radar Today

  • CA: BoC today, which will be Poloz’s last before the new gov takes over. Likely to be similar to yest’s RBA – a wash, saving the tool belt for down the line.
  • AU: 1Q GDP -0.3%a -0.4%e +0.5%p, Building Approvals Smash it -1.8%a -10.7%e -4.0%p (guess Aussie has not been lying over the month of Apr)
  • CH: Caixin Serv. PMI +55.0a 47.4e 44.4p => that’s such a big beat, that KVP would be inclined to dig into the numbers… again remember Caixin Mfg. also beat on Mon 50.7a 49.6e 49.4p… this is not in-line with the general bearish rhetoric on China economic recovery
  • UK: Final Serv. PMI 27.9e 27.8p… again a wash, as its data from lockdown period, PMIs here not likely to count until mid to late 3Q…
  • EZ: Final Serv. PMI 28.7e/p… ditto to UK., PPI & U/R  [Don’t forget ECB tmr, surprise & risk would dbe if they did something & Euro reversed lower… low delta]
  • US: Final Serv. PMI 37.2e 36.9p… ditto to EZ/UK comment… ADP, Crude Oil inventories, ISM Non-mfg 44.2e 41.8p


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




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