In 1605, Miyamoto Musashi, a young ronin samurai and quite possibly the greatest swordsman to have ever lived, was challenged to a duel.

The challenger was another young man named Matashichiro from the Yoshioka family, a clan renowned for their swordsmanship. Matashichiro was looking for that dish which is best served cold… revenge. And for good reason, Musashi had recently slain both his father and older brother in separate duels.

...a lot of dueling, I know. But that’s just what people did in those days. Netflix and chill weren’t quite yet available. But I digress...

Musashi’s samurai friends warned of a trap and offered to tag along. But, being the badass he was, he refused and went alone.

Musashi would often play mind games with his opponents. For instance, he’d show up to duels in strange dress or with unconventional weapons — he once fought with a sharpened boat paddle, and won…

One of his favorites was to arrive late, frustrating and angering his opponent. This is what he did when he fought both of Matashichiro’s family members. So that was exactly what the Yoshioka clan figured he’d do again.

Matashichiro arrived at the appointed place a few minutes early, bringing in tow with him a small army, rumored to be 20-men large. Expecting Musashi to arrive late, they laid down and hid in the tall grass in wait to jump him once he arrived.

But. Musashi had their number… He’d arrived hours earlier and had taken cover behind a large tree. As soon as the Yoshioka men laid down, he leapt out with sword in hand and yelled “I’ve been waiting long enough… DRAW YOUR SWORDS!”

His opponents, startled, stumbled to their feet in a daze. In one fell swoop, Musashi killed Matashichiro, then proceeded down the line taking out each of his men — 20 in all — one by one, in a matter of seconds…

In this world, where the game is played with loaded dice, a man must have a temper of iron, with armor proof to the blows of fate, and weapons to make his way against men. Life is one long battle; we have to fight at every step; and Voltaire very rightly says that if we succeed, it is at the point of the sword, and that we die with the weapon in our hand. ~ Arthur Schopenhauer, Counsels and Maxims, 1851

Wild story, isn’t it? If you’re into this type of stuff I recommend picking up "The Book of Five Rings", which Musashi wrote himself. On the surface, it’s about the art of swordplay though it’s really about the art of strategy, and performance, and why it’s crucial to understand the game one is playing.

This brings us to a good jumping-off point for what the Macro Ops Collective is… what it isn’t… and how it might (I say might, because the Collective definitely is not for everyone) help you.

Help you in your trading strategy, boost your performance both from a portfolio and personal perspective, and understand the game(s) you’re playing at a second level and beyond…

You see… Your average market participant is much like the poor Matashichiro. They’re unimaginative, they’re reactive, and they don’t really know what game they’re playing.

They are the ones who write, tweet, and televise such poorly informed and mistimed headlines such as those below… including the even poorer souls who listen to them.

We’re not just talking about retail folks here.

No… There are just as many (if not more) Matashichiro’s wearing Italian suits and managing hundreds of millions, even billions of dollars. They look successful, talk real smart like, and hug the benchmark for dear life so they don’t underperform and risk losing their AUM that they get to collect that sweet 2% carry on.

There’s no shame in being one of these people. In fact, we all start out as Matashichiros. And the vast majority of us remain as meddling swordsmen. Occasionally lucking upon a big winner, only to follow it up with an equally big loser… doing just okay enough to maintain the delusion we’re on the cusp of really performing, really getting better, and finally moving up to that next level.

Thank Zeus for the Matashichiros… They’re the ones who make this game so lucrative for the few Musashis out there. They comprise the oft-repeated and very true stat that 95% of traders and investors fail to beat the market, while the remaining 5% make a killing.

Our goal at MO, nay… our driving unending desire… is to foster as many Musashi-level traders and investors as possible… So we can train, learn, and grow alongside them. Make a butt load of money, create positive change in the world, and have a helluva time doing it all.

We accomplish this through better research, better process, and better training. Let’s comb through each one.

We are drowning in information, while starving for wisdom. The world henceforth will be run by synthesizers, people able to put together the right information at the right time, think critically about it, and make important choices wisely. ~ Edward O. Wilson

It is mind-blowing to think about how much information is available now versus 20 years ago, or even just 5 years ago. And yet part of the problem is a data deluge. It is incredibly tempting to be distracted by useless information… or to pay undue attention to the wrong information… or to self-select news sources and get trapped in an echo chamber, which is part-and-parcel for the middling average. The potential pitfalls go on and on.

As the flow and volume of information increases, the ability to parse and sort that information becomes an ever more valuable skill. There are parallels here to the way grandmaster chess players process chessboard information versus amateurs.

While the amateur has to painstakingly work through a complex situation — analyzing, say, ten different possibilities in detail — the grandmaster uses a process called “chunking” to reference a library of patterns in his head, then immediately zeroes in on the one or two pattern matches that are relevant.

This creates both a speed advantage and a depth of analysis advantage: Having cut away the subpar lines of play more quickly, the grandmaster can either move more quickly (saving time and energy) or invest a savings of time and energy in deeper, more nuanced analysis of the two moves that matter. The natural synthesis process increases speed, accuracy, and efficiency simultaneously, thus allowing for compound investment of the surplus.

We at MO want to help you in synthesizing this noisy world. So as to allow you to block out ALL the noise, focus on the few critical inputs, risks, and trends that matter. And make more money as a result. The Collective exists to make you a calculating, ruthlessly efficient, and consistently profitable investor.

We do this through superior quantitative tools, an informed contrarian research process, and a frequent review of our results so we can test, learn, and iterate to better outcomes. Constantly evolving as investors as well as a service. So the MO next year will be significantly better than the one today, and we’re pretty damn good today.

We have a holistic approach to markets. One we call the Trifecta Approach. 

Unlike most research services that focus solely on value investing or quantitative or macro, etc…

We have deeply studied it all... have teased out what works, discarded what doesn’t, and combined it all into an exponentially better approach.

We do deep thematic research focusing on the biggest, most misunderstood, and overlooked trends in the world. A current example is our work into the new semiconductor demand supercycle (example here).

We started writing about this budding trend back in 2017 and have stayed with it ever since, growing our conviction as well as our positioning as the data confirms our research. Doing so allowed us to book a 20-bagger in AMD calls in early 19’ (link here) as well as a 1,400%+ return on the Micron DOTM calls we bought in the Fall of 20’, which we still hold and do not expire until Jan 22’.

A key differentiator between us and other research providers is that not only are we not afraid to take a wildly out-of-consensus view when our process says to do so, but we absolutely love being the outside zebra.

Matashichiros safely stay in the efficient market box. They really like it there. It’s easy to comment on what’s already happened. It makes them feel smart when their estimates on AAPL’s next quarter earnings are close on the mark.

Too bad for them, because that’s not where the real money is. For that, you have to travel outside that crowded space and place your bet on underwriting the future. It takes guts, imagination, and a hard-tested process… but that’s where the Musashi’s operate. That’s where we make our killing.

We’re big believers in Garry Kasparov’s (the chess Grandmaster) idea that unique human intelligence, combined with powerful machine learning and quantitative tools, is vastly superior to employing just one or the other. He calls this the centaur approach, you know, named after the mythological half-man / half-horse creatures.

Years ago I worked for Palantir which is now a large well-known tech company. But back when I was in their employ, they were just a start-up data company that tailored to the intelligence community. Anyways, this is the exact approach Palantir’s technology uses. It’s why their software easily outperforms AI/ML in intelligence work and fraud detection. A skilled user paired with powerful quantitative tools is a force to be reckoned with.

It all goes back to cutting out the noise, creating a high signal filter, so we can better synthesize key inputs.

We currently have two quants on our team who are building out a host of tools. Tools that we and members can use within a tested framework to make better decisions.

Here’s a few snapshots of our dashboard (we don’t have a name for her yet, HAL maybe? idk...).

We’re going to continue to build this out until I no longer need my Bloomberg terminal, and then keep building it some more. Our goal is not to have a bunch of indicators but rather to have a carefully crafted set that all complement each other in producing a higher combined signal.

Anyways...

Here are some recent examples of our regular output.

By me (Alex):

• Weekly Market Notes: politics “Spiraling Towards There”, geopolitics / commodities / philosophy “A Hungry World”, straight-up markets “Sleight of Hand”, and theory “Market Murmurations”

From Brandon, our value expert:

• Weekly Equity Notes: Japanese semi “Murata Manufacturing”, small-cap ammo maker “Ammo Inc,” an innovative sushi restaurant chain “Kura Sushi”,
  

We’re also in the process of building out a weekly quantitative chart pack that will assess all the major assets and markets each week, which is something I’m incredibly excited about. This will be hitting the press within the next month.

Well, then, my boy, develop your strategy So that prizes in games won’t elude your grasp. Strategy makes a better woodcutter than strength. Strategy keeps a pilot’s ship on course When crosswinds blow it over the wine-blue sea. And strategy wins races for charioteers. One type of driver trusts his horses and car And swerves mindlessly this way and that, All over the course, without reining his horses. But a man who knows how to win with lesser horses Keeps his eye on the post and cuts the turn close, And from the start keeps tension on the reins With a firm hand as he watches the leader. ~ The Iliad, Homer, 9th century B.C.

Process is everything and then some.

At MO we’re maniacal about continuously studying, updating, and iterating our processes. Middling traders and investors hope to make their cheese using innate skill and their self-deluded ideas of genius and grandeur.

We don’t suffer from any such illusions… I’ve had my teeth kicked in by the market too many times to believe such nonsense. It’s a beautiful and liberating day once a trader can release himself from those ridiculous egoistic shackles and finally get down to doing the proper work of making money.

My first mentor in this game (a highly successful former IB prop trader who left Wall St. to manage his own money) was a man of methods. I called him Spock because when it came to markets, there were no emotions, no questions as to what he should do or when he should do it. The guy was a machine which is why he’s worth 10s of millions…

He had processes for news consumption, for conducting research, for entering trades, and for exiting them, for sizing, etc… he even had a process for reviewing and updating his processes. I was, and still am, in awe of him.

Our work on process, strategy, and methods is one reason why portfolio managers love us. Nobody else out there is doing and sharing this important work. And it’s a LOT of work. We’re continuously working on devving out and testing new methodologies, new trade structures, new exit routines. And then of course sharing what we learn with the group.

Our Trifecta Lens Score Indicator and approach for applying hedges vs buying dips is an example of what was born from this effort (example here).

When we recommend trades, we give trade structure, sizing, and exit information too. Knowing full-well that stock picks are a dime a dozen and about as good as a handful of wet crap paper if they don’t include the above.

Real students of the game never stop learning… We can’t. We don’t want to. One of the great things about markets is that they’re always changing, and so do our skills and knowledge base if we want to stay competitive.

The Collective exists to help you do just that. All Collective members get access to our Vault, where every single theory, strategy, process, book notes piece we’ve ever written sits. It gets added to monthly.

Also included are influential white papers, webinars, mini-courses on everything from our DOTM strategy to analyzing EMFX and more.

Here’s an example of our book notes “Deep Work” which is also one of my favorites. Here’s a theory piece “OODA Loop” on a personal hero of mine, famous Air Force pilot John Boyd, and his even more famous OODA Loop process for fast and effective decision making.

In our quest for constant evolution, we recently developed a quarterly DEEP DIVE. This is where myself, the MO team, and fellow Collective members who want to partake, work together on a single subject. It can be anything of interest.

This quarter we’re kicking off a deep dive into advanced options and vol trading. We’re going to read the best books, white papers, record interviews with the smartest professional traders in the space (luckily we have more than a few in our group). Then dev out and backtest some new strategies, create some “What We Learned” reports and mini-courses and share it all with the group.

I don’t know if you can tell, but this stuff is what gets me up in the morning...

This is my favorite part of the MO Collective… The community. The Collective gives you full access to our Private Slack group where the MO team and fellow Operators from around the world spend a good chunk of time each day shooting the sh*t about everything from health hacks...

To sharing research and trade ideas as well as planning local meetups and get-togethers.

I can say with 100% conviction that our community of traders and investors is THE BEST on the internet and it’s not even close.

I’m a firm believer in the idea that we are the product of the people we choose to surround ourselves with.

Through the Collective, I’ve met fellow traders and money managers who’ve now become dear friends, and from whom I learn from daily. It’s amazing and incredibly humbling to be able to serve such an incredibly talented group. And we’re all working to help each other get better, learn, improve, and evolve as traders and human beings.

Everything in life conspires to push you into the center, and not just politically. The center is the realm of compromise. Getting along with other people is an important skill to have, but it comes with a danger: by always seeking the path of least resistance, the path of conciliation, you forget who you are, and you sink into the center with everyone else. Instead see yourself as a fighter, an outsider surrounded by enemies.

Constant battle will keep you strong and alert. It will help to define what you believe in, both for yourself and for others. Do not worry about antagonizing people; without antagonism there is no battle, and without battle, there is no chance of victory. Do not be lured by the need to be liked: better to be respected, even feared. Victory over your enemies will bring you a more lasting popularity. Man exists only in so far as he is opposed. ~ GEORG HEGEL, 1770–1831

Middling men (and women), the Matshichiros of the world, seek comfort and stability by walking well-worn paths. They stay close to the herd, and never straying too far from safety, from the known, from the consensus…

But as Ray Dalio put it, “you can’t make money agreeing with the consensus…”

Markets just don’t work like that. You need vision and the willingness to fly solo and underwrite the future. You have to be proactive rather than reactive. You have to efficiently filter out the deluge of noise and have a tested process for getting at truth. You have to have backtested trade structure and sizing methodologies as the basis of your approach.

The Collective is your tool for doing this. For doing ALL of this…

We work day and night to filter the key information for you. To give you signals for when to pare back risk and when to go for the jugular. To give you the tools and process to excel beyond your peers… no matter if you’re a 20-year veteran hedge fund manager or a maniacally devoted recent MBA grad. We exist to support your trading and investing success.

We have been told, by multiple people, that the core concept behind the Collective is a work of genius — or at minimum sheer brilliance.

Yet the power of the Collective isn’t a testimony to the brilliance of any one individual. It’s all about evolution… and in that regard, persistence far outranks IQ.

We have been working on improving the Collective — tinkering, iterating, experimenting, refining — for years now.

It started as a very rough idea. Then it grew… took on a life of its own… evolved.

Evolution is central to all progress. When you know what to look for, you see it everywhere. The great ideas, the great strategies, the great masterworks, do not spring forth like Athena from Zeus’ forehead. They are a product of experimenting, observing, refining, and testing… with talent and serendipity mixed in.

This is my all-time favorite Nietzsche quote: “Many are stubborn in pursuit of the path they have chosen, few in pursuit of the goal.”

If you’re devoted to living as a Musashi, join our team in our stubborn pursuit of a shared goal… The goal of excellence in markets and in life.

Your Macro Operator,

Alex