How's it going everyone? I Am here today with a very very special guest. We're going to be talking about quantitative trading, but in the world of hedge funds, I'm here with Dylan Johnson how are you doing today I'm so excited you could join me. Good how you doing I'm having a phenomenal day, always craziness in the market and I think we're going to get into a very interesting conversation of how someone in your particular seat actually not only views what's happening in the market, but almost views the structure as a whole and really to get a little bit more philosophical on you of just like how you approach trading so for everyone listening for all the audience matters, can you explain kind of what you do, who you are and even kind of like more of how you got here of course. So um I've been in the hedge fund industry since 2014 and I actually was involved in launching one of uh, two friends of mine at the time out of college.

My work was the predominant strategy, it ran the fun and uh, you know you're coming out of school and you're getting into this industry from the ground up and you learn a lot along the way and your career develops from scratch. It's a, you know, a learning experience to the least. What I would say that? Uh, my background is largely self-educated through a lot of reading and Analysis and working of data. Uh, it's an applied digital and statistical signal processing techniques that um I have gravitated over the years towards viewing those techniques to being the most fundamentally viable techniques to make trading decisions around.

Sorry to interrupt you. there. Is this actually what you studied in college? Because that's where you said you mentioned you like met people. That's I Did I Went to school for economics and Finance, but I was able to get about one-third of my credits as independent studies where I studied fields and waves Digital Signal processing statistical signal processing and uh, time series analysis and being able to do that through a self-directed study program with the faculty.

with Uh, extremely advantageous to me for my ambitions to get to where I'm at today. Wow, Now is that something that you were able to do with the Bachelors Did you go into like a master's A PhD because like me, I have a stem background, but so that sounds like pretty impressive there? Yeah, No. I didn't pursue more education I actually went right into the industry out of college. It was pretty eager to get in there and actually build and apply models which I had to build the time to gain Real World experience I Think that's what's going to teach people way more than a theoretical academic perspective when dealing with a complicated engineering problem which is trying to time the market and or trade and manage risk around the time series that you're viewing on your screen.

How did it like my mind is already being blown? Because how did you even know that so early on? like I was always interested For example, in stocks I was like oh, like I try to buy low, sell high but it sounds like you approached that early in college. So there you are at 18, 19, 20, 21. like kind of already knowing you're going that path like did you have like a parent, a grandparent, a mentor who's like, hey, like kind of going on this path like I'm just curious how like this world even got opened up to you if you will um not really. I had a high school math teacher, it was a very successful investor and um, he was actually a very rich guy.

He just taught for fun to be honest gold Futures his entire life. but um, he kind of got me interested in 14 and that's whenever I started reading a lot of the Uh traditional books on fundamental and technical analysis like Edwards and McGee and you know, the intelligent Investor I read those at 14 and 15 years old. I'm like around 15 I read high powered Investing For Dummies just you know Turtle Trader You know it's very typical books at a younger age. it is kind of compounded itself.

So um I had completed the CMT level one program at 18. and I became very I became very disenchanted of technical analysis quickly because of its subjective you know material. Around 1899, gravitated towards more model building through Perry Kaufman's work. Uh, you know new trading systems and methods was kind of the Bible for me at a young age and I just geometrically learned and read everything I possibly could while I was in school and that's when I started building models.

it's about 18 19 years old. uh simple stuff like adx scanning on tradestation, uh on battles volume Crossing its own exponential moving average stuff that you know I laugh about now but still has Effectiveness and is really good to learn. so uh, that's kind of how I got into it and whenever you whenever you try to the best way I could explain to people is you need to know what you're looking at. when you can identify what you're looking at and you can Define it.

you can then reverse engineer it and build Solutions towards it. and that's basically what the market is. It's an engineering problem. Whenever you're coming from a hedging trading or risk management perspective, you know.

I Title the market as a continuous stochastic transverse waveform because that's what it is and when you understand what it is, you can take it apart and understand ways that are effective to analyze it. So we know that markets exhibit mean version We Know Markets exhibit Trend We just don't know when it's going to be each one so you can build viable strategies for each market regime, but knowing whenever to implement and how to make them actually work in the real world with real money is a whole different topic and a whole different ball game of expertise. Now let's just say for like a second theoretically let's just assume you have doubled the intellect I do and I don't know what an Abracadabra waveform is? Could you explain that to me in a little bit more of layman's terms of like how you're viewing the market? Um, it experiences random random movement of different regimes and because of that, you can't be sure what it's going to do in the future. But we do know it operates as a waveform that propagates with Randomness meaning it has directional movement.

We just don't know how long it's going to exhibit what amplitude or duration of that movement. So that's where it becomes a engineering problem. So at that point then are you looking at the odds of these situations of like okay, this is more of like the way I lose. Always taught about systematic training is two forms you have mean reversion and you have Trend following.

So are you almost looking for? Let's just say a super basic example: the deck to get stacked in your favor and then that's when you're putting your money on the table. You're like okay, we think that there's like a statistical likelihood of whatever XYZ happening and the higher it is, the more money you'll bet yada yada yada as a component of it for sure. I mean there's also a component of um, just trading what you're in and you can allocate out. you know Capital Like you said in different situations, which I do do? Um, but I think more of it is understanding what you're looking at and really what the market is is a gigantic statistical noise issue and you're really trying to figure out where you're at and where it's going with a relative degree of certainty.

In order to do that, you have to implement which I believe or a lot of um, complicated mathematical formulas that operate in a very simple Manner And that's pretty much a fancy way of saying. you need some very complex math to operate very simply to have effective results driven trades I Like that. So you're developing this framework in college, you're feeling more confident about it. You end up graduating and obviously it seems like you wanted to get more so into the world of Wall Street Training money management obviously running a fund? Tell us about that.

You graduate, you get your cap and gown, and you know you want to start dealing with money on the market. I Wouldn't recommend my path the most people. first of all, uh I Came out of college and launched a fund. We had a blockbuster.

First year we were in the top two percent of Performing long-shirt Equity Funds Received the Hfri Constituent award. We are up after fees about eight and a half percent. The market was negative like 17 basis points. Oh wow, and this is you at like 22.

23. wow I mean talk about did you like psycholog. Did you feel like king of the world like top of Mount Olympus there I was relatively well grounded, but there was definitely an error of like over optimism because the next really bad. Actually, we were down like 16 because the strategy I was running was a momentum strategy, right? A fairly complex one calculation wise, but operating very simply.

and um, the following year in 2016, he had the legendary volatility drought in the S P 500. We actually haven't seen one that bad ever since then. So natural I didn't do as well and had a loss. and um, you know one of the events that we went in was we had a short momentum signal and I was uh, managing like eight or nine million at the time and we were trading basically the sector ETFs like XLE Espy all those individual ones and I went and borrowed two to one margin.

So I'm basically like 20 million dollars short the S p and that morning you have the Mario Draghi. We'll do whatever it takes. Bazooka right in my face Soul crippling million dollar hit in a day. Oh back.

So you know when you're 23 years old and you're managing Millions for people and you've never been in a real trade desk, you can kind of invented your own because you're running a hedge fund of 23 and you're uh, you got a Blockbuster year and now you're getting pounded. You know it makes you grow up very quickly because there's no you know, mentors. there's nobody to Hold Your Hand You're the one who makes the decision. You're the one who wins and loses.

And I think that that's a very important part of this business is losing. I Don't respect traders that don't lose or haven't lost. No because they will eventually lose. How they can handle that psychologically and running the business, not even from the trading decisions, is what determines the fate of the company.

man. So if you end up launching your fund of weak stomached people, if they have a bad year or Draw down, they'll probably want to get out of it or get scared and the business will collapse. You cannot have Partners or employees or guys you work with who are weak, psychologically, worried about their reputation, worried about how they look to other people. They need to go sell insurance or be financial advisors.

They have no business and managing money. I mean I Think that's a it's a brutal take, but it seems like it's a very honest take because it is. I mean we've all been in the situations of Even in our like, relatively small personal accounts, those swings are gunning and then all of a sudden you're throwing in the fact that you know it's other people's money a lot of the times. I Don't know if it's true for you, but when people start their first, uh, fund a lot of times it's your family's money.

So I would assume the emotional toll. like has to get really, really brutal there. So coming back to your story, you get out of college, you crush it. the first year, second year.

Not so ideal. What's going on? How's that year end? At one point you were leveraged up to 20 million. Where are we going from there? year down? about 16 And at that point, me and some guys, well, one of our separate ways I want the one way of the founder and myself. He was, um, instrumental to being launched.

Great guy. The arrow guys were good guys. They just weren't men for the business. So we basically said, hey, we're gonna go our separate ways I Wanted to go into the Futures Trading route and so they're trading the S P sectors for many different reasons.

but it's cheaper, higher rate of return. it's just it's just better to trade features than ETFs and kids trade Futures Everybody else trades nothing I mean you could be a great stock Trader That's cool. but whatever you could trade Energy Futures or S P Futures You have unlimited scalability, you can manage billions and not move the market, and that's the direction you want to go if you want to be a big boy in the industry. So I said okay, how do I do this I met a guy from Goldman Sachs it was a big time energy Trader you know, worked at Jay Aaron's desk, worked at many different hedge funds, made a lot of money, very successful.

knew a lot of people in the street so I started prop trading with them and sort of building models more geared to trading Commodities But I wanted to be sure before I did anything. So I spent about four or five years gaining that experience, cultivating and building models, trying to get things on you know, in development to actually make an all-weather set of signals and strategies. And when I finally felt comfortable that I was able to network of the right people, took us a year to get a fund set up, but we have just launched so that's just kind of my story in my background. Man, that's so cool out of my own curiosity.

Uh, when you're getting it not only from a money standpoint and like I know right now. Well, the past year the economy's been a little rocky, so is capital drying up? from maybe even a legal perspective. Is it tough to like legally structure one? Like what are some of the major hurdles that you were like? It was really different to difficult to overcome, especially if you weren't expecting them. I Would say the biggest problem to deal with in this industry is going to be raising money.

Um, raising money is difficult because it costs money to raise money. and if you don't have somebody who can cash flow the business and I mean substantial cash flow, you need to have someone who has deep enough Pockets to carry it for years. and you're looking at minimum half a million a year between salary, paying the bills, operation expenses, marketing expenses, the whole nine yards to do it. Okay, 100, 500 Grand a year, arbitrarily, four years.

You know what I mean Some people don't care, some do. They're going to find somebody who can throw two million and just burn. and then there are 500 Grand or a million to trade and not care. That's probably the the hardest part is finding that guy to bankroll you if it isn't your own money to get in the world of hedge funds and start building it now.

Maybe it's just the timing's different or who knows for all I know. Maybe it's just like interest rates. But when I was reading these biographies of people such as um I don't know from Pearson square like if we're talking about like Ackman dalio Cohen it seems like they all have kind of like humble beginnings like I Started with this like has something in the industry just like pivoted or just isn't Back then things were like cheaper to keep going I mean I come from a coal town on the border of West Virginia power plant maintenance mechanic. So I mean I came from very limited capital and money and now people are hungry selling this business.

People are smart, excel in this business. If you have both, you're going to make it and you need to have both. So coming back to this fact that you like Commodities and you're bringing up a lot of reasons. One of the things that I talk to other retail people about the thing that and this is for definitely small people.

but I still love it. As retailers, there's no pattern day trading the amount of stories I hear of that just like tripping people up and their account gets frozen for whatever 90 days. No more training. But folks, if you listen to this right now, you can trade Futures And granted, you probably should have more than 25k just because of margin blah blah blah.

But my point is, there's no pattern day trading. If you want to go in and out from one point all day long you can have at it and that's just the function of how this Market really works. You should if you're going to trade. Futures I Recommended Thirty thousand dollar account balance to start and you would trade the micros.

If you want to trade the minis, you need to have probably 70 to 100 000 to be safe. I appreciate that. Yeah, no that that's a common question. So like right now and I don't know if my audience knows this, but just to share with you I'm Chinese treasure right now and that's what it is.

One micron NQ one micron NS or ES excuse me and that's the S P 500. That's the NASDAQ and you could just size it down and obviously from there it's just a tenth of this size. So folks, I'll leave some references in the description of this video if you just want to see what it's like and the sizing and all that. but it's a beast of its own.

Like there are similarities with the equities Market There are similarities with the options Market especially in terms of terminology. but then there's a lot of things that you can only find in the Futures Market There are aspects of the Futures Market that it's just there and it doesn't really. Exist Elsewhere My great point is extremely liquid, extremely scalable for track record, and it's open 23 hours a day during the week. So you have the ability to make money whenever you need to, and you have the ability to not have to worry about liquidity problems.

Yep, you have a stock, you know, and you buy a whole bunch of it and some earnings announcement happens the next day. you're down. You know something you can do about it with Futures You don't have that problem as much. There's a little bit of one of the weekend wrist, but I mean there there's more.

There's more. accepted levels and ranges that I think in trading individual Futures can help with beginners in. Risk Management If they trade small, you know crude oil. Is it going to go down 20 in a day Very often? Yeah, probably never.

But I mean you know you're not dealing with a lot of like Gap risk of Futures I Suppose individual equities. individual equities are expensive to trade. You know I mean it's cheap to trade Futures especially Energy Futures that's why I love it. So is that specifically what you should like right now? Are you mainly trading oil? Are you in the world of natural gas? Like if you're after this call before this call, what were the main things that you're trading? hi Max Crude predominantly okay, so you're just following now.

are you looking at it So I get a little confused myself because like I'll be looking at oil and I'm paying attention to it. But it does seem like sometimes there's binary events of like what is OPEC doing what is OPEC not doing. It seems like there's almost geopolitical risk. Is that something that like, sometimes you just get burned Or are you attempting to model that? or is that something that every single day you're doing your best personally to predict what's going on in the geopolitical scene.

A little a little a little secret to looking at data is everything gets discounted price especially beforehand so it's something's going to make it move no matter what it is. It could be a news event, Could be an OPEC decision. Could be a really bullish or bearish Eia number. It doesn't matter I don't care it.

there will be events that start happening in the time series quietly like preceding events before a large Avalanche like small snow tumbling that will end up leading to huge volatility expansion. So I don't know what it's going to be that makes it move well I Don't care now. Do you feel that indifferent about like really any Market Would you feel that way about gold about sugar which has been ripping recently? Things like that, actual stocks to likes and shares as data points on social media. Interesting.

so to you it's just whatever I am like. So you sit down at the computer and you're looking at well, of course it's a mathematical problem, but you're not really in the game. Then of like fundamental prediction, you don't care who the next president is, You don't care the next law that is signed or isn't signed. You are literally looking at some sort of mathematical event and or pattern to happen and then that's a trigger for you.

Yep, interesting. Now with that, I'm sure within this you've probably met a lot of people who are trading by their gut. They just have a feeling you've probably talked to people who are just like hardcore fundamental analysis almost like Warren Buffett types. Now with it.

Do you think they all have their place in time? Or do you actually think that your way of viewing the market is the best way of viewing the market? My I'm gonna have a very unpopular opinion, but if you have two million samples, one of them is going to be this outrageous outlier, right? Okay, there's somebody out there that probably almost never lost a trade just by the sheer amount of people that have traded. I've never thought about that. but I agree. So then Warren Buffett and different Mega Traders are just products of a large system, the entropy of it.

So that's how I view them. They're like the one in a million type of organism that's going to happen to somebody and they just happen to get lucky. Yeah, it was them. Right place, right time, right connections.

Is that okay? He was this one guy who happened to really create Factor investing through fundamental analysis and value way before everybody else. So let's look at Warren Buffett's returns Now to war above its returns in 1957. it's a form of Arbitrage gotcha. He's being Arbitrage out slowly.

in my opinion. let's look at two. Sigma Citadel's returns in 1995. Compare them to now.

I mean the trends down gotcha. But then you look at a real engineering firm like um, Renaissance Technologies they're going up. or Citadel's returns lately have been so big because we know that they kind of controlled or flow so their guys can piggyback off that. So yeah, they did knock on the park.

but like their main quantitative strategies, get harder and harder to produce results of more money because other people figure it out right? Uh, they find an edge and if you're the first one too, it's just a race to like who's exploiting the edge. Arbitrage exists in everything except for taking risk. like my work doesn't get arbitraged out because I like directional movement and I'd like to take risk. So unless you can eliminate markets that move and directional movement, my strategy will never get Arbitrage down.

Okay, I think I follow that. No, this type of thing. You brought up retina songs For those of you listening who, maybe you haven't heard of them, it's one of the It is probably one of the most well-known quad trading funds out there. It started by a mathematician and the returns are something that people just don't understand.

They're jaw-droppingly good. So people like them. Uh, you mentioned two Sigmas I think there's de Esha Aqr I Believe these are all Quant firms Now to you like is it kind of all the same technique or is the the things that they're looking at and their vantage point of the market? Or do they wildly differ or are you guys kind of all roughly in the same ballpark? Well, I mean I Would say their methodologies of looking at everything is markedly different than mine. Okay, their argument would be that ours is mathematical, time tested and true.

They don't like. they don't like what they can't make sense of from a relatively s valid mathematical perspective. Even if it isn't sound, they don't care. But it's valid enough.

they look at it I like a lot of theoretical wild stuff. So what people would say would absolutely not work I'm going to see if it does and I'll spend seven months on it and lo and be old. stuff that people say won't work, will work. You just have to be willing to be laughed at and do the due diligence.

I Like that. So talking about working and not working could you just shed a little light of maybe a couple War Stories of things where you're like hey, I felt super good about it I put money on the table and you knocked out of the park and then maybe if it's not too painful, maybe the opposite. There were there times where you're like I'm feeling really good and then unfortunately it just went bust on you. I mean I I Would love to really try and indulge in their stories, but for the most part I have a signal based approach.

So what? I I Can say. There are certain time series regimes that are particularly brutal, like in crude Oil Quarter Three of 2019. Terrible. Um, first quarter of this year was absolutely terrible for trading crude unless you're just trading a very tight range.

So certain situations depending what work you're running, that can be particularly brutal. But there are situations for other people who like me in aversion, who got absolutely decimated and covid right in 2020. Crude oil pretty much went from 70 bucks a barrel to negative in the six-month line. So it means I would say the worst time I ever got hammered was a druggie bazooka trade.

Probably the one of the best trades I ever had would have been whenever I was net short the S P for about 20 million in August of 2015. And we had the China devaluation crisis and I absolutely just obliterated in three days. Made a ton of money so that was actually pretty cool. But the whole time that's happening, you're not hitting buy or sell it right like you.

you created the code and the methodology for it, but like it is literally your trading robot that's doing the buying and selling for you right. like you're just sitting there and watching it. Yeah, so the only time I get involved. so I make so much money, I'll just take a big chunk of it off the table.

Okay, like dumb to not to at a certain point because you have to be statistically reasonable. It's like if I just made 20 which I did in three days on my fund. Um, take a big chunk of those profits off the table. What's the probability of making 50.

Yeah right, it's got them at a certain point. so there is like a like a hard risk management component that's in the strategy over that too for the most part. Yes, I don't really make any trades about a single deciding what I should do man. I'm just sitting here with like a little smirk on my face because I imagine that there's been a time where you go to bed and like you said, Futures trade on the Globex session.

which means it's 20 Trading 23 hours out of the day and you wake up and I'm sure there's times that you've woken up and you're up. Five figures, six figures while you're sleeping. like conceptually, that's crazy because I think so much of retail thinks of this is I need to sit here from 9 30 to 4 every single day and I need to watch every single minute bar and I need to YOLO trade zero GTE options like a baby that's wild and sometimes you wait and I'm sure other times you've woken up and you're like oh that could have been better but like just this concept of it's doing the work for you exactly as you wanted to and you talk about like passive income and it's not really passive I use that term loosely I have woken up to being down and up millions of dollars that's so amazing and you're just sitting there like casually eating. You're like chocolate croissant from Starbucks like normal morning.

an extreme move for me to even give. Like to be honest Brazilian Trade Yeah, it almost seems like a bigger driver for you would just be like more of updates on the fun like are you getting funding or is this like more of like I Know it's obviously all business related, but I'm not saying the the trading within the business, other external business factors. The biggest stress in this business is managing and dealing of drawdown which is inevitable for any legitimate hedge fund in a legitimate Trader it's going to happen. There have been years where I had no drawdown like virtually none which is amazing when you're just like so thankful for the very years I've come out of the gate getting absolutely hammered and you gotta claw your way back.

You gotta trust your work in your process and you're going to put on more risks sometime that you want to get out of the hole. And that is the toughest part of this business that breaks people that really is and especially whenever you're dealing with like real money from other people and like for me with my investors and my clients, it's humiliating to be down if you're supposed to be an expert and being able to not beat yourself up and lose confidence in your work and programming process and be true to your fiduciary mandate is the most difficult part of managing your own and your investors expectations. That makes sense now. I would assume they get harder.

It gets more difficult if you will as things scale. But speaking of scaling like we're talking about your fund and then also here in New York I could like be reading about I don't know a random bank that's like trillions of dollars or Goldman recently had a bad quarter because of their bond training which I think was billions of dollars. Look is the goal for you to scale as big as possible or is there a mathematical theoretical sweet spot for you? Like if I could get to this, that's where I want to be no bigger, no smaller type of a thing? Yeah, so um I I want to trade energy predominantly my verse fund and there's a number for that. It is relatively high, but it would be considered a mid-level hedgehog.

Nothing crazy. Okay, I'm just staying in the mid the mid-level hedge fund AUM range I Like to be nimble I don't want to move markets or even track any attention in that regard because when you get so big like Citadel or Bridgewater it becomes political at that point I mean you are a part in the economy I have no interest in that. So yeah, I would probably if like you gave me a number to throw to your 500 million to a billion to trade 15 margin equity ratio I'd be more than happy with in capital and at that size that doesn't move markets that would not move the crude oil Market I would not because you're really only trading 150 or 200 million dollars for the Futures and a billion to be if in safe risk parameters. and I mean there's trillions of dollars of crude oil globally traded so you're not really I mean like on a physical level? you know what I mean so you're not even a paper, it's less.

But I mean you have 500 000 contracts on the Nymex. Prompt month a day being traded and that's not even ice. Yeah, so you're not gonna really do much damage there. I'm just cracking up because I feel like, uh, not from a social aspect but just from like almost like a Negative Nancy you supposed to be like, not fun at all to bring to Vegas because you're going to be sitting down at the games and be like no, we shouldn't play Blackjack because they have an edge of two points? Really? Really? But doesn't the house still have the edge in that? I was just playing it the other? isn't it like two to three percent.

You need to know how to bet and when to bet and roulette and know why? So is it like, uh, not so we don't go too far off the rails. Are you more of like the Martingale like if black comes up five times in a row you start betting red just because of like the odds start to favor you over that series. Pretty much interesting so a man of roulette I like that. All right.

So anyway, back to the main thing here. for the people listening. They're like okay I get it. I Want to try out systematic trading I Want to try out quantitative trading.

Are there certain books you would recommend? certain websites like the average person who maybe has a little bit of this mathematical capability. What is your advice for them to actually get started? There's there's five books I would recommend um Perry Kaufman's new trading systems and methods Robert Crawford's three books and Robert Pardo's um, analysis and optimization of systematic trading strategies. Okay, I will make sure to put those on the description everyone listening so you could just look there. I Do appreciate that.

And now just moving on a little bit. So obviously it sounds like you are much more reactive to recent mathematical patterns within the market. But even then, I'm sure you're taking in the news day over day. Do you have thoughts on the oil market right now? Do you have thoughts on the overall market right now? Or is that really like? I'm not in the game I Can almost guarantee with a lot of certainty from my own analysis that we're going to view the overall index markets probably being ranged about for quite some time.

You're going to have this 4 500 level to 3500 level. maybe lows of 3 000, maybe highs of 4 800. but I mean we're going to be range bounded in my opinion for a very long time. so so long time.

Well, retail is some of to retail. That could be a couple weeks, but it sounds like you're talking about potentially in excess of a year. Yeah, probably years. Okay I think I mean I think there's a there's a chance to get a big crash or a range bad indefinitely I Don't think we're going to see a continued bull market Higher and Higher and Higher and break new highs.

Not for a while. What about the energy? Market Recently I've been reading about OPEC data so oil went up but it seems like all year natural gas is doing nothing but vomiting. Do you have predictions for people thinking about like when they should be? I don't know, filling up their oil tanks or something like that. I mean I'm a signal-based guy in my data truck.

My work tracks the data so I can't really give you any real macro perspective because of Commodities. You know it's so supply and demand relevant whereas the equity markets are a lot more macro and part of the infrastructure of the world. Now, they're not really independent on supply and demand, so it's two different animals. You know? One reason why I went to commodity trading is to get away from the Federal Reserve's influence in the markets, which is so unbelievably prevalent now.

I mean I was considered an alarmist 2014 and 15 about the Feds involved in people thought it was crazy the FED isn't manipulating or moving markets, so now it's a known fact. So what's going to end up happening next is unless the Fed, you can continue to do so. Unless we can build more market cap for individual companies to prop up the indexes, you're going to have stagnation or a sell-off of de-risking and deleveraging. So there's not really much of a bull thesis.

so I don't really see Equity markets going much higher. And for commodity markets, it's going to come come down to geopolitical events. What's going to happen if China and Taiwan What's going to happen if the situation in Europe and Russia are things going to get worse globally of War upheaval. Whatever that is going to depend on these different nations making their decisions on how they're going to interact with each other, which I think will ultimately be what creates larger Sigma moves For commodities, Geopolitical tensions calm down and we're more fundamentally driven and those numbers will come out and we'll pick a Direction.

But you know with uh, it's funny that you said alarm is 2014 with the FED because right now I feel like uh, almost from a populist movement standpoint. that's one of the popularities of Bitcoin of like somehow storing value outside of the world of monetary policy, especially in a forever expanding credit system. Do you have any personal thoughts on crypto? Do you like it? Do you think it's a sham? Where are you at on that? I was a big Um advocate of crypto being a outrageous side effect of 12 years of Federal Reserve policy that was Reckless and I advise Alex and her people last year at the peak to get out of it and I'm not surprised that it crashed. Um I don't think it's a a safe haven I Think it has good Merit I Think it's trying to do well, but I think the real safe haven is being able to build legitimate, systematic training strategies to trade, directional movement and volatility in Commodities equities.

indexes. That's your real I Can live through any Market scenario and make money without having to be exposed to gold or indexes or crypto or bonds. I mean all you're really doing in that situation is trying to find a place to hide. So in a way your timing anyways, right? Yeah, No, definitely.

Well, what about to someone? Um, let's just say you were talking to like a grandparent out there. They don't really necessarily have time to work on these strategies or something like that for them in this environment, Would you just be like, hey, you're going to get a five percent yield from bonds Like is that where you would Okay, Okay, so you're gonna do like a bond laddering type of a thing and because like, the yields are nice right now I Would I would recommend for the time being for the next 18 months look, but in real estate locating Equity exposure and putting the majority of your money in cash and tables can't trade, that would be my recommendation on what to do until we can see how the Federal Reserve is going to handle the entire situation, the economy, inflation until we can see some geopolitical tensions. Calm down or not. no, that's that's completely fair.

and I still I'm thinking about what you're saying and I I like that the way you put it of, regardless of what happens. The best hedge is you having systems that can go both ways and handle these events. Whether things are quote unquote good as in bullish, quote unquote bad of bearish for you, it sounds like the only thing you don't like is chop like it sounds like little short-term chop is worse, but as long as you're training, it sounds like you're pretty indifferent. Sideways markets and chop are what obliterate me.

so that's all you care about. Men I like it I Like it. Um, is there anything that you just want to leave with the listeners to this right now of maybe a couple next steps or anything on your mind that you want to clarify. um.

reading is Paramount uh. The books that I recommend are beginner level books. They need to be read and retained and it's going to be a long road if you want to do this appropriately and it's not for the faint of heart, it's a tough business and requires strong psychological discipline and emotional discipline. If you are somebody you cannot do that, you will just waste your time and money man.

I Think that's a perfect way to end it I Truly appreciate your time and as things develop I Hope we bring it back on the show again in the future, but once again for me the audience thank you for your time and your insights. Thank you have a good one.