Jan

6

I asked Gemini if the Nvdia stock price milestone dates associated with Jensen Huang's famous leather jackets. Here is the timeline of Jensen's jacket evolution alongside Nvidia’s stock milestones:

The one that caught my attention is Lizard Era in March 2024. At that time Nvdia price was around $100 and after Jensen's Lizard Jacket appearance Nvdia stock fell 20-25%. And here is Jensen while debuting new chips last night. We will learn soon if the Lizard Jacket is a helpful tool for front running Nvdia stock!

Steve Ellison likes the idea:

Very unique and insightful analysis. My wife read a biography of Mr. Huang. When he was growing up in Oregon, his immigrant relatives wanted to put him in a private school, but the school they enrolled him in was a reformatory. After that life experience, I am pretty sure that Mr. Huang can't be intimidated by Donald Trump or Xi Jinping.

Peter Ringel adds:

agree. probably useful insights can come from seemingly absurd corners. Like the weather of sports teams in NYC.

Jan

5

So where lies the thin line between liberating Venezuela and putting world into oil supply based recession?

Larry Williams comments:

The quality of their crude is a different issue we use to refine it here; sour, full of gravel etc.

Stefan Jovanovich writes:

Historically, before full sanctions in 2019, the US imported over 600,000 barrels per day (bpd) of Venezuelan crude, with refiners like Citgo (PDVSA-owned), Valero, Chevron, and Phillips 66 as top recipients.

More recently (post-2023 relief), Valero accounted for 44% of imports, Chevron 32%, and Phillips 66 10%.

Carder Dimitroff writes:

IMO, it's not about oil. The US is a net exporter. They're doing just fine without Venezuela. If heavy oil is desired for refining optimization, as some claim, there's a direct pipeline from Canada.

Stefan Jovanovich responds:

It would help if Carder focused on the use of heavy oil for marine diesel and bunker oil for steam turbines. Those are the essential propulsion fuels for China's Navy; hence, Hegseth's comment today assuring China that it would continue to receive its share of Venezuela's output.

Carder Dimitroff expands:

Globally, three major regions produce heavy crude: Russia, Canada, and Venezuela. Downstream, “heavy oil” or “heavy fuel oil” usually means the residual, high-boiling product left after lighter fractions (gasoline, diesel, kerosene, etc.) are distilled from crude. As Stefan suggests, heavy oil and bunker oil are growing markets, not only in China but also elsewhere.

In my opinion, the administration's interests in Venezuela reflect several interests. High on my list are Venezuela's untapped rare-earth elements (about 300,000 metric tons).

Pamela Van Giessen offers:

Interesting analysis here:

The Real Reason the Pentagon Approved Venezuela: Critical Minerals and Adversary Expulsion

The Department of War has allocated $7.5 billion under the One Big Beautiful Bill Act specifically for critical minerals, with $1 billion already deployed to stockpile antimony, bismuth, cobalt, indium, scandium, and tantalum. This is not economic policy. This is national security infrastructure. The United States is 100% import reliant for 12 critical minerals and over 50% reliant for 28 of the 50 minerals classified as essential to national security. These materials are not interchangeable. They cannot be substituted. They form the irreducible foundation of modern weapons systems.

Boris Simonder questions the thesis:

What rare earth does Venezuela hold that is proven and confirmed? Based on USGS Mineral Commodity Summaries 2025 and other sources like CSIS reports, Venezuela has no significant cobalt production or reserves listed. Antimony deposits exist but are small and underdeveloped, with declining output due to infrastructure issues.

Dec

22

It will be the first time mainstream institutions, such as ETFs, banks etc. are so heavily involved with this asset class if it is repeating the historical pattern.

Cycle 1 (2010 - 2013)
• Peak: December 2013
• Drawdown: 93% from ATH

Cycle 2 (2014 to 2017)
• Peak: December 2017
• Drawdown: ~86-87% from ATH

Cycle 3 (2018 to 2021)
• Peak: November 2021
• Drawdown: ~75-77% from ATH

Cycle 4 (2025 to ???)
• Peak: October
• Drawdown: 30% from ATH for now

If 70-80% drawdown repeats, Bitcoin will be below 40000 and Crypto Treasury geniuses will be meeting with Trump for a bailout! But Who will bailout Trump?

Nov

21

Yesterday's range in VIX was one of the widest & wildest one I have seen in a very long time that happened without any major news. Wednesday close to Thursday low 18% decline followed by 46% rally to the day's high. Is there anyone who can check the occurrences in the past and how SPX traded in the following days of such a massive range explosion?

Asindu Drileba responds:

The Chairman's book, Practical Speculation, has a detailed analysis of the multivariate relationship between the VIX and the SPY. Unfortunately I forgot the page, and I am currently not close to my copy. [see pages 107-110] But it has something to do with how the fluctuations around the average of the VIX affects the SPY.

Paolo Pezzutti does some counting:

#VIX +11.71% at 26.43
Highest close since 24 April
Since 2020 VIX>26 has occurred 290 times.
After 4 days the Emini S&P Futures:
+27.01 pts Mean, 63.4% Wins, 1.63 Profit Factor

Larry Williams cuts to the chase:

Vix goes up when stocks go down they are inverse of each other—no magic there are all.

Nov

21

Sheep needs to be regularly sheared to take off some extra wool- it is actually good for them- healthy!

Henry Gifford adds:

Back in the day sheep didn’t have people handy to shear them. A farmer told me that over the past few hundred years sheep have been bred to grow more wool, thus they need people now, but before that change the sheep didn’t grow as much wool.

Steve Ellison writes:

The S&P 500 reaching its lower 50-day Bollinger band on Thursday might indeed indicate some modicum of panic, as might VIX being well above its upper 50-day Bollinger band.

I have thought sentiment was quite restrained this year given that the S&P 500 was at a record high as recently as October 28. Bears have outnumbered bulls in the AAII survey for the past two weeks. And the publishing of a book titled 1929 was very well publicized. I perceive that out in the general population there is a lot of fear about AI; lots of scaremongering about AI eliminating nearly all white collar jobs.

Cagdas Tuna comments:

Many years ago when I was a teenager, I heard this from the head of top brokerage firm in Turkiye and he said "It is not news until it matters." Circle funding of AI companies and its effect on jobs have been long discussed at least by the people I follow on social media but it has had no impact until yesterday. So can we say it has become news now?

Nov

10

The more goods cost, the more money visa makes since the fees they charge Issuing banks & acquiring banks are based on a percentage basis. So, higher prices (inflation) –> better predicted revenues for Visa? Inspired by a nice documentary on the history of VISA.

I wonder what the best indicator for inflation would be for testing this? CPI? Oil?

Cagdas Tuna writes:

I was thinking as to find a similar indicator for economic slow turn, spending cuts. It came to my mind to follow sales slips. I live in Malta which is a very tech friendly country for spending habits such as Apple/Google Pay availabilities, many digital banks access etc. I often asked if I need a receipt that I usually don’t. It depends for every country but if there is a rule for stores/restaurants to keep at least a copy for each transaction then it might be the indicator to follow. It might be used for inflation as well but of course needs detailed information.

Pamela Van Giessen comments:

To the best of my knowledge, merchants are not required to keep receipts. We track each sale but it will be the credit card processor or platform such as Square that holds the credit card or Apple or Google pay receipts. I can’t imagine that merchants would be willing to share their sales data. I know I wouldn’t.

Visa doesn’t care how much goods cost. They get their nearly 3% processing fee (+ .10 or .15 per transaction) whether there are 20 transactions for $100/ea or 40 transactions for $50/ea. In fact, they make more $ on a higher volume of transactions.

I don’t think tracking Visa or MC, etc could be a meaningful prediction of inflation as all the credit card companies continuously fight for market share. Note that they all send out multiple credit card offers to everyone all the time. Then, you have a store like Costco that only accepts their credit card (Citibank).

Additionally, there are people who use primarily cash. Those $ would be left out. You may say that cash use is low, and maybe it is. What I can tell you is that today at a market 80% of my sales were cash and that was likely the case for all the other merchants at this market. Older people especially use cash a lot. Just like drug dealers.

I have a theory that the cash economy is much bigger than everyone thinks. Insight into that might be more interesting.

Carder Dimitroff responds:

After considering Panela's cash sales point, I remembered that several companies required customers to switch from credit card payments to bank transfers. Additionally, several small establishments offer incentives for customers to pay in cash. They may be attempting to simplify their accounting and tax reporting. I do know that the federal government has immediate access to individual credit card transactions.

Pamela Van Giessen adds:

I thought it was the Fed that used to report on aggregated credit card data.

The other challenge with using credit card financials is that the credit card processors raise their % cut all the time. This is not due to actual inflation; it is due to them having a government protected moat that allows them to take more and more whenever they want because merchants are stuck with the whole system and consumers don’t realize that they will pay for the service — in increased prices. Every time Square, PayPal, etc., send me notices that they will be increasing fees, I increase my prices. I guess that is a kind of proxy for inflation but it’s a lousy sort of financial market induced inflation not based on anything more than their desire for more profits. I am all about free markets but the credit card processing biz is not even close to a free market.

The government using credit card processing to surveil us may be one reason I see more and more people using cash.

Larry Williams suggests:

Stock market is good predictor of inflation.

Oct

23

As a European, I am asking: Are US regional banks in trouble (maybe even some larger banks - incl Investment banks). Dodgy consumer loans, then those silly "AI-related" loans? Am agnostic here - I suspect the typical analyst from JPM down the road won't enlighten us here.

Paul O'Leary comments:

No. Looks like over-reaction to a couple credit blips. Then algos pile on and observers who don’t follow the sector conjure up doom scenarios. Zion Bancorp - the main sinner, lost $1B in market cap for a $50mm write down.

Nils Poertner responds:

Hear you, Paul. If enough people would start to worry now, I would worry less (let us see).

Cagdas Tuna adds:

We are at a level any reaction will be exaggerated. If market adds $200bln to NVDA market cap with additional $1blnn revenue then $50m loss will have the same effect on a smaller company's share.

Oct

22

Are the furloughed government employees going to be counted as unemployed? I believe they will be which will be considered as a huge green light for 50bps rate cut in the December FOMC. This shutdown is the perfect storm for Trump’s “Fire Powell and get rates to 0%” scenario.

Bill Rafter responds:

The requirements for being “Unemployed” are that (a) the person is not working , and (b) that person is “looking for work”. I believe the latter qualification would disqualify those furloughed from being considered as unemployed. Not only the shutdown [will delay BLS releases], but the recently nominated BLS head, E.J. Antoni has withdrawn his name from nomination. So BLS is headless.

Alex Castaldo comments:

That is good news for all statisticians, I am sure he is a wonderful guy but he had a reputation for mistakes in calculations.

Oct

21

AV1 is a new video compression format that may reduce the size of a video file by up to 50%. The big advantage is that videos will be up to half the size, with the exact same image and audio quality.

Two big consequences may ensue (when AV1 is fully adopted):

- Internet bills for streaming Netflix will reduce.
A 2 GB movie will only cost 1 GB from the perspective of a customer paying their Internet Service Provider. So more frequent subscriptions?

- Netflix will cut its bandwidth costs by 50%. So the profit margin (respective to bandwidth costs) will go up by 50% if users fully adopt AV1?

Currently, AV1 is only available on select hardware chips (listed table on Wikipedia) Maybe as users get new devices, use of AV1 will grow. This will likely happen gradually over several years (maybe half a decade). But an obvious winner would be Netflix & YouTube (Google Stock). Maybe bandwidth is so cheap it won't make a dent in the business revenues? But all major companies seem very enthusiastic about implementing AV1. Maybe bandwidth has it's (less talked about) variant of Moore's law. Where after a few years it gets easier to move stuff around the internet.

Cagdas Tuna wonders:

How many nuclear plants we need to feed that endless “technology”?

Nils Poertner asks:

How would you express this into a trade idea, Asindu? I find it easy to put ideas into a trade - it encourages deeper thinking and gives a feedback when wrong. eg, I was bullish housing London property 2007, but short-term it didn't really work out at all! longerterm yes. it was fuzzy thinking of my behalf.

Asindu Drileba answers:

Going long $NFLX since the business is largely about streaming video. The same pattern occurred in Tesla when the cost of efficient batteries dropped by like 90%. So margins automatically go up. (in theory) Tesla could have still gone under due to debt or something else. So, of course it may may fail (most likely)

Another big draw back is that such "qualitative" insights cannot be tested in the past. Maybe a good analogy would be to go long Starbucks $SBUX if you think the price of coffee wil drop the next 5 years by 50%.

So the ideas may be generalized to:

- Find key Ingredient company X uses in thier products

- Find out if the drop in key ingredient's price over 5 years improves profit margin over X years -> positively impacts stock prices.

This general idea, may then be tested across several industries for example:

- MacDonalds (drop in price of beef)

- TSMC, ASML, INTEL, NVDA (drop price of silver) as silver is very essential in chip manufacturing.

Hopefully testing this across multiple industries on different historical accounts may yield some consistent patterns.

Nils Poertner responds:

Good to write it down in a trading journal and look in a few months what happened. Started writing hand-written letters to friends now. In our digital age, everyone incl me, is going for speed, but deeper thinking - also quality in thinking /research is underrated. Intuitively speaking - we are prob getting some unexpected moves coming, as well.

Oct

19

In Casino Royal (2006) there is a speculator called Le Chiffre. He would manage money for war lords & other "underground" clients. He would take positions in markets, and then "manipulate them". For example in this clip, he takes a short position in an airlines company, then later bombs a plane belonging to it.

This year, I am starting to think that Le Chiffre is real. Someone opened a crypto account on Hyperliquid (decentralized exchange) and made an $88m profit from short positions that very day.

Cagdas Tuna responds:

Good catch! I have been reading these whales news since March-April 2025 mostly tied to Trump’s policy shifts. It is not difficult to guess who those Le Chiffres might be related to!

Peter Ringel writes:

I wanted to place 1 Nov in my calendar - as a new Mkt Risk date based on Trumps post. Only to realize, I placed this date regarding tariffs before. This makes this old news to some degree. And all of this is potentially an overreaction / a play.

Ed. - lagniappe: Forget Sean Connery, Watch James Bond Make His Real Debut on TV

Before Connery registered his license to kill in the 1962 hit Dr. No, millions of viewers were introduced to Barry Nelson’s “Bond, Jimmy Bond” in a 1954 episode of the CBS anthology series Climax! The show’s producers secured the rights to adapt Ian Fleming’s just-published debut Bond novel, Casino Royale, during their first season.

Since the Climax! version of Casino Royale is only 50 minutes, the plot has obviously been shortened considerably. And yet, if you’ve read the book or, more likely, seen the 2006 movie version that launched Craig’s Bond career, you’ll recognize the basic narrative, even though none of the familiar 007 flourishes are in place. In fact, Nelson doesn’t enjoy “00” status at all — he’s merely identified as a “Combined Intelligence” agent who is tasked with competing head-to-head against the mysterious Le Chiffre (Peter Lorre) in a rousing game of baccarat.

Jeff Watson does some research:

James Bond, the complete list…there are more than you think:

Please list every James Bond on film, TV, and radio. Grok: Alright, here goes-starting with the big-screen Bonds: Sean Connery, George Lazenby, Roger Moore, Timothy Dalton, Pierce Brosnan, Daniel Craig. Then David Niven in the 1967 spoof Casino Royale. On TV, there's Barry Nelson from a 1954 Climax! episode of Casino Royale. Radio Bonds? Bob Holness in a 1956 BBC Casino Royale adaptation, Tom Hiddleston in a 2014 Heart of the Matter series, and Toby Stephens in various BBC radio dramas.

Apr

14

Looking back at 2008

April 14, 2025 | 1 Comment

A Few Observations, from Victor Niederhoffer
October 12, 2008

1. Of the 100 biggest markets around the world, almost all are down 40- 60% in dollar terms with the exceptions' being Tunisia and Botswana. The impact of the decline this week, unless rapidly reversed, is going to be very severe on purchases. The previous 20% caused great angst; imagine what this decline will do to those who rely on retirements. The positive feedback of the decline in a negative direction also impacts the election results with every market decline making it more likely the Republicans will be blamed for the situation.

2. The worst aspect of the decline this week from a health point of view was that fixed income around the world cratered, thereby reducing world wealth by a good 15% as opposed to the normal situation where the equities go down 10% and the fixed incomes go up 8% leaving total wealth down only a little. And the people that talked about how bearish it was for stocks because commodities were up would never say that it's bullish now because commodities are down 40% over the past four months.

3. A new word should enter the market vocabulary, a waterboarding decline, being a decline that seems to have a breath of life at the open before going into a death spiral.

4. Because of the decline in all sectors, the wealth/price ratio has stayed relatively constant with corn, copper, soybeans, wheat and oil down 40- 50% since June 30, thereby keeping the number of bushels and barrels we can buy with one DJIA relatively constant, making the number of ounces of gold you can buy with the Dow less than 10 for the first time in a googol, and looking like a bargain for the Dow.

Cagdas Tuna writes:

The plan was to make US assets cheap and make everyone afraid to invest in them(thanks to VIX spike Monday). We all make joke of him but Trump’s post few hours before 90 days pause was the peak. Look at inflation numbers it is officially coming down as most companies were planning this sh*t beforehand. The more we see bad news the bullish stocks are.

David Lillienfeld responds:

You're making the assumption that we're done. I don't know that we are.

Nils Poertner comments:

in any case - def good to watch out for anomalies, or things that shouldn't happen and then they happen - and then there is more of it normally.

Feb

7

It is not hard to see this is very late stages of speculative madness but I really would like to know how the risk management teams approve buying Nvidia stock here after adding $200 billion to market cap in 3 days?

Larry Williams offers:

Maybe my cycle forecast for NVDA would help:

Asindu Drileba writes:

I don't know why people are still buying Nvidia. But this is what I personally think of the stock. Nvidia has an 80% market share in the Graphics Card business. Their bread and butter used to be video gaming, 3d animation, video editing, later crypto mining, AI (computer vision), AI (Large Language Models), AI (Image generation) possible new advances may occur in Molecular Dynamics, Self driving cars etc. The CEO had an interesting interview where he talked about possible areas Nvidia may venture into.

But here is one strange thing about high performance computing (Nvidia's Niche): We would think that the better (higher performing) their products are, the less people would buy because people would do more with less right? It's actually the opposite.

— In gaming for example, when graphics cards improved people moved to less polygon looking characters and wanted more details like finer hair & plants. From there they even went to more computationally intensive algorithms like ray tracing that mimic real world scattering of light. Requiring even more compute in subsequent algorithmic advances.

— In Bitcoin, many people using Nvidia GPUs made it more difficult to earn money from crypto mining. Which requires people to have even more Nvidia GPUs just to continue earning the same income.

— In AI, when ever a new breakthrough was made, researchers often trained models with larger datasets, using more & more GPUs. Chat GPT for example was trained on 1 Trillion corpus of text.

So if they do maintain this 80% market share and these underlying industries continue to grow (and make new break throughs). It makes sense that Nvidia will be very valuable in the near or distant future. Buying now (at all time highs) is definitely dangerous but, even if the bubble pops, the underlying industries it facilitates will still be present. And if more breakthroughs in these industries are made, it makes sense that Nvidia still has some value left in it.

Cagdas Tuna responds:

Good fundamental points and there I have 2 counter outlook:

-Gaming industry; I almost everyday play an online game called Destiny 2, and their developer Bungie has reduced workforce around 10%. I know many other gaming companies are reducing/reduced workforce which doesn't give too much optimism in that area.

-Bitcoin mining; there is halving in a few weeks and this will require more powerful computers but it will also increase the cost which in the end will end up new miners losing money in most cases. Only way to maintain gains in mining is Bitcoin price to double or triple in a year.

Even on the best possible scenario it will not add 200 billion dollars worth growth in many many years.

Steve Ellison comments:

Words of wisdom from Rocky's Ghost, posted in the Spec List on April 4, 2017. And yes, I am long NVDA. I believe this is the study Rocky referred to.

Soros and I share very little. However, I have come to agree with him that the right position is to be long "bubble" (however defined). I used to subscribe to Anatoly's view and to be bearish during bubbled but I discovered that from a risk-adjusted-return perspective, it's better to be right "today" than right "tomorrow." Along this point, I read a study that shows a substantial percentage of stock returns occur during the last surge in a "bull market". If you miss this surge, it's very difficult to keep up with the indices in the short term. And in the long term, we're all dead.

Asindu Drileba replies:

Gaming Revenue was about $142B just in 2022. If cloud gaming, something Nvidia is planning todo is successful, I expect this to jump by several multipliers. I expect Cloud gaming to be a bigger business than say AWS. Gaming is really big, I believe you have heard about gaming being bigger than movies & music combined.

The Crypto market cap is $1.6T, a lot of these Crypto currencies use graphics cards to mine their currencies. So I don't think $200B is too much. For Nvidia which is well positioned in these industries, i.e., owning 80% of that market.

Humbert H. adds:

One fundamental point about predicting the future of NVIDIA. It's a complete accident (lucky for NVIDIA) that the hardware optimized matrix multiplication used for 3D graphics pipelines was also useful for AI.

K. K. Law riffs on The Great One:

Confirmation bias. And this is where the AI computation puck is at of course.

Cagdas Tuna realizes:

Now I see why everyone chasing this momentum with FOMO as all assumptions based on Nvidia will get all of the cake in the market!

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