Trump’s Market-Moving Tweets Are Awesome

Believe it or not. I love the tweets from @realDonaldTrump. No matter what the content of the tweets are, I love the fact it moves the markets. Why would I love it? Because I love volatility.

In December, Trump tweeted out;

The tweet sent shares in small uranium miners soaring, including Uranium Resources (NASDAQ: URRE) and Uranium Energy Corp. (NYSE: UEC) by 31% and 13%, respectively.

Despite the real world complications, I just love the fact it agitates the markets.

More tweets;

These tweets, as you can guess – sent the shares of Lockheed Martin (NYSE: LMT), which is the supplier of F-35 program, and Boeing (NYSE: BA) – down. From both tweets, Lockheed Martin lost billions in market cap. The rival Boeing was barely unchanged at the end, as it means more opportunities for them to gain more contracts.

However, Trump targeted Boeing in earlier December when he tweeted this;

The tweet sent the stock price down by 1%, but ended the day flat.

Year-to-date……so far, Trump has already targeted General Motors (NYSE: GM) and Toyota Motor (NYSE: TM);

Trump’s tweets are just awesome. The volatility it brings allows me to make more money than the non-volatility. As I mentioned in my previous article, I recently opened RobinHood account, broker with $0 commissions. Using the broker in the future, I’m planning to buy some shares of the companies Trump negatively targets, especially if investors overreact.

Since it seems Trump has a strong hatred towards Mexico and the U.S. companies working there, here are the potential targets;

It seems there are seconds delay until the stocks react to Trump’s tweets. That’s rare considering the era of algorithm trading which can react in milliseconds and less.

Algos have yet to incorporate Trump’s tweets into their codes. It’s not that simple yet as it can be difficult to determine the sentiment from a tweet. Algos can easily get the direction of the stock wrong. We need more tweets to better analyze it.

But, will the future tweets move the markets or not? It all depends on how successful Trump is in implementing what he tweets. If Trump is unable to do so, he will just lose credibility.

Meanwhile, markets will react to the tweets and I plan to take advantage of them.

Trigger (originally a class project at Cornell Tech) just recently introduced “Trump Trigger” that will send you a notification every time Trump tweets about your investments. Not an algo, but notification that can be useful for amateur investors. Not my thing.

Photograph courtesy of Trigger

Almost 4 years ago, Associated Press (AP)’s twitter account tweeted out;

Photo: Screenshots.
Source: USA Today

It was tweeted minutes after the account was hacked. Seconds after the tweet, S&P 500 lost $136 billion in market cap., before quickly rebounding.

What if Trump’s account was hacked? The account can be exploited for financial gain, to cause geopolitical instability, or worse.

Whatever it is, I plan to take take advantage of them for financial gain.

Speaking of Twitter, follow me. I tweet about some of the articles I read, my trades and some sarcasm. Unfortunately, my tweets do not move the markets……for now.

Forex Portfolio Performance: Inception & 2016

 

WHAT A YEAR! Market sell-off. Complete reverse afterwards. Full of surprises, from Brexit to Trump (not for me since I predicted them).

During the global markets crash in August of 2015, I completely lost all the money I made that year plus some more in forex. Witnessing markets free fall – faster than Luke skydiving 25,000 feet without parachute – for the first time ever crushed my account to death. (For the record, I wasn’t trading in 2008 and had absolutely no idea what was unfolding that time).

Thinking euro will go to the parity level by the end of 2015, most of my positions were crowded in shorting EUR (The Big Short). Just when I thought euro would follow the markets, it acted as a safe-haven.

Lessons learned the hard way:

  • Always keep enough cash for emergency and/or new opportunities (could not make new trades)
  • Do not keep most things in one place (EUR short)
  • Do not let the perceptions – media, traders, experts, you name it – fool you (“Euro is not a safe-haven asset”)

Taking all these lessons, I completely changed my strategy and will continue to tweak it to adapt to the current conditions. After taking a break from trading in September (2015), I opened a new forex account.

Started off strongly, with high standard deviations, but enough for me to sit through that. High-risk/High-reward. As I continued tweaking my strategy, I reduced the swings in the P/L.

Figure 1: Forex Portfolio % Returns Since Inception (09/29/2015)

Starting in August 18 of this year (2016), my returns have been very stable, trending upwards (see Figure 1). It went from 144.49% return to 184.42% as of the last trading day in 2016. Last August, I made a significant chance to my strategy which led to stable returns trending upwards. I continue to tweak my strategy little by little until significant change is needed. Repeat.

Since inception (09/29/2015), I have returned 184.42%. In the second half of this year, I deposited more money into the account. In turn, the % returns you see in the pictures above and below, has a huge difference in nominal amounts.

Figure 2: Forex Portfolio Performance Since Inception

In 2015, I returned 117.48%. This year, I have returned 32.82%. Since the inception, percentage of profitable trades are 50.70%, with the average gain per trade 3.82 larger than the amount of average loss per trade.

Sharpe ratio is 1.13 (not good yet), with average monthly return of 11.01% and 33.79% standard deviation of monthly return. Compounded monthly rate of return is 7.22%.

I predicted Brexit and profited bigly off it. 30.77% of the profit came from pair GBP/USD. Thanks Brexit. How did I predict Brexit?

Predicting Brexit – 6 tweets
Figure 3: Top 3 FX pair P/L as a % of the total P/L

Largest loss was 5.21%, from pair AUD/USD. I don’t know what to blame except myself.

As to predicting Trump’s win, the profit was a fraction of Brexit profit, via other pairs than Mexican peso currency. The day after the election, the peso suffered its largest one-day drop since the Tequila Crisis of the 1990s. Too bad I did not have access to peso pair at the time. How did I predict Trump win? Tweet 12.

If you invested $1,000 in me at the inception, that money would have been worth $2,844.23 today.

You can still invest in me. Minimum investment is $1,000. Contact me for more details.

Thank you.

Update: “Equity/Commodity Portfolio Performance: Inception & 2016” article is posted.

Biggest Failure of My Career: Hedge Fund Club

 

Do not train a child to learn by force or harshness; but direct them to it by what amuses their minds, so that you may be better able to discover with accuracy the peculiar bent of the genius of each. ― Plato

It is Wednesday, February 27, 2013. I’m giving a speech in front of 50-70 people on why they should elect me as their treasurer for Key Club at Edward R. Murrow high school.

During my junior year in high school, I became a member of Key Club, an organization which provides its members with opportunities to provide service, build character and develop leadership. This was the first club I ever joined, after avoiding all clubs and school events for 2 years.

After the speeches for all positions, members were to vote a person of their choice for each position. Unfortunately, I became in 2nd place for the treasury role. Well actually, I was in the last place since there were only two people running for the position. It was not a big deal for me anyway.

Several months later, I was sitting in my room staring at the news and currency charts. I was thinking about my future; college and career.

As I was thinking, I promised myself I would open my own club in college. What kind of club? I don’t know. But, I will open a club. Only time will tell.

A year later, I’m sitting in the same room staring at the news and currency/equity charts. I was weighting the costs and benefits of attending certain colleges. After being rejected from my number one choice, Columbia University, I had to choice between Binghamton University and Baruch College.

Why not Binghamton? Tuition was over $24,000, $14K had to come out of my own pocket (unless I got scholarships; not guaranteed). In others words, I would had to take out a student loan, which I promised I would never take. Lastly, the campus was four hours away from the financial capital of the world; New York City.

On the other hand, one major reason I wanted Binghamton was that I would move out from my parent’s house and be independent. But, the benefits were heavier on Baruch’s side. To this day, I still live with my parents; rent-free with……um……no……um……..no responsibilities.

During my first semester at the city university, I started going to Finance & Economics Society (FES) club. At the end of the semester, they were few positions open, one of them: Sales & Trading. I applied for it, got interviewed, and got accepted into the program. I got accepted not because I stood out from the crowd, but because there was no competition at all.

Joining a club with some smart people that conducted themselves professionally, was uncomfortable for me. A confront zone is a beautiful place, nothing ever grows there.

Over the next three semesters at FES, I learned incredibly so much both career-wise and personal-wise. Two important skills I gained were debating and leadership, thanks to Kenneth Tjonasam and the team. As the director of the S&T program, Kenneth challenged me and others to give our own ideas and asked us tough questions when we gave it. And he did much more than that.

Charles Schwab got paid a million dollars a year in 1920s, because of his leadership skills;

Why did Andrew Carnegie pay a million dollars a year, or more than three thousand dollars a day, to Charles Schwab? Why? Because Schwab was a genius? No. Because he knew more about the manufacture of steel than other people? Nonsense. Charles Schwab told me (Dale Carnegie) himself that he had many men working for him who know more about the manufacture of steel than he did.
Schwab says that he was paid this salary largely because of his ability to deal with people.

That’s how good Kenneth was. Except in this part, he is also a genius.

In the middle of sophomore year, I had a flashback; sitting in my room and promising myself I would open a club. At the time of the flashback, I was sitting in my room staring at the news and currency/equity/commodity charts. Without contemplating, I planned to start Hedge Fund Club (HFC).

I wanted to share my passion with others and give back to the Baruch community. The purpose of HFC was;

Hedge Fund Club’s purpose is to trade financial instruments actively while allocating different asset classes effectively. To maximize capital and minimize risks, the club will use top-down approach and technical analysis to find the best investment opportunities. The club will offer opportunities for the Baruch Community to get know the hedge fund industry and network with the people in the industry, developing Baruch College’s exposure to the hedge fund industry.

Over the next several months, I filled out the papers the student government wanted, in addition to finding a club adviser. My team and I chose Bruce Kamich, well respected and highly talented technical analyst professor at Baruch College. Professor Kamich was the best fit for the HFC’s mission and I’m thankful for his advice. I have yet to take his class.

And finally, the student government asked my team to hold three HFC meetings before an interview with them to get the club chartered.

My team (Vice-President – Thomas Jing, Secretary – Jamal Moody, and Treasurer – Jinay Shah) and I held the meetings in April and May, attaining 14 members. For the undisclosed reasons, the interview was forwarded to early September. Over the summer, I along with my team worked on most of the PT presentations and outlined the meetings for the fall semester. September came and there still was no interview. To sum up, there’s no HFC anymore (unless someone else starts it).

I take full responsibility for the failure of Hedge Fund Club. This is the biggest failure of my career. And this will definitely go into my book.

The reasons for the failure is classified. It will be declassified in my book, or when I’m on the cover of Forbes. (Few people know at this time).

I will continue to guide people who might be interested in markets/trading/technical analysis/investing/blogging. I will continue to meet with them during my own time.  I will continue to have conversations with them. I will continue to debate with them. I will continue to ask “why” if the reasons are not clarified.

While the vision and the goals for HFC will not see a light anymore, I will let it shine after college. I plan to create my own program and/or join a mentorship program.

I have seen extremely talented students. I want to make sure they use their brain for something they love. I have seen students with a strong curiosity in a subject (mostly finance related). I want to make sure they continue to build their knowledge foundation and guide them, but it’s up to them to choose which road to take. I have seen students with no clue what they want to do when they grow up. I want to make sure they go out of their confront zone and try out new things.

Wander around the unknown and you might just discover your passion. – Khojinur Usmonov

Interviewed By Bloomberg

In the morning of Friday, July 15th, I’m going to the lower Manhattan, where I will meet my mentor from NYSSA SEMI Program. During the commute, I’m thinking about the current events, my trading strategies and how handsome I am.

While I’m waiting for her, I sit down and chill. By chill, I mean looking at the prices of stocks and currencies, and checking Twitter (news junkie).

While I’m staring at my phone, someone comes up and introduces himself. He explains a story they’re trying to pursue, “How to Stay Cool in Summer While Wearing a Suit”, and he wants to take a photo of myself and ask few questions.

Why not?

After the picture and questions, I ask what media the story is for. He said “Bloomberg Pursuits.”

I never heard of “Bloomberg Pursuits”, but I sure have heard of “Bloomberg.” In my mind, I was thinking “I made it!!!”

But, the story is directly about fashion, not finance. I have always thought of being on Bloomberg, talking about the financial markets. That will happen soon. I don’t know when, but I’m confident it will happen.

This was a great memorable experience. There’s more to come. I will be on Bloomberg countless times.

One question: After how many interviews by the media, will I get used to it?

Stay tuned…


How to Stay Cool in Summer While Wearing a Suit

Photography by: Keith E. Morrison/Bloomberg
Photography by: Keith E. Morrison/Bloomberg