​So what's out there to help you review your ETFs? I found a new web platform called Logicly that works for this. There were a couple holes in my ETF research game that Logicly is really great at fixing.
​The first is fund flows. We have all seen how the ‘retail investor’ tends to buy at the top of market runs and sell in a panic near cycle bottoms. Analyzing fund flows helps an investor quantitatively review those trends.
The picture above is just an easy dashboard to review this data. Side note, the Value vs. Growth and the Small Cap vs. Large Cap inflow trends from September 2020 are still in place. You can also see that there are outflows on the NASDAQ 100, momentum factor and minimum volatility factor funds. Allocate accordingly ......and do so before the next round of balance changes!
As with all metrics, this is not a perfect science but if you have a some extra dry powder, you can deploy it when you screen is flashing all red with a bit more confidence.

One other data point Logicly presently nicely is when you are reviewing the stock holding concentration of the ETFs you own. Below is a screen of $TSLA position size in ETFs sorted by highest weighting.
Concentration isn’t inherently a four letter word in regard to portfolio construction. As Allocators, we are usually seeking diversification but that doesn’t ALWAYS have to be the case. Have you ever used most of your Stardust on your best Pokémon? You will be one sided in battle but if you are conscience of that shortcoming and are monitoring that weakness closely, this strategy can be substantially profitable in the short and long term.

Music bed provided by Deadmau5

Did everyone enjoy their summer? I hope so, I sure did. But as with all good things 'Nothing Gold Can Stay'. It's good to be back though and I really enjoyed taking a break from the day-to-day investment research grind, social media food fights, and getting a (much needed) change of scenery.

How about those stock markets? Of course I kept up with that and surprisingly the Meta has not really changed all that much: $IVV flatlined in June and ramped up in July and August. $QQQ did even better and took no days off. However, the tides may be going out if last week was any indication. Strong sell offs like these first few trading days of September are the ones that can shift the momentum and break the trend. Here's the historical perspective behind the sentiment courtesy of Yardeni Research. 

​From a factor perspective it most definitely seems so. Anecdotally, nearly every institutional portfolio manager I have spoken with recently has mentioned that their firm's research is recommending a rotation to small caps and value. However, when I take a closer look, this guidance seems less like a bold call made with conviction and more of a punt.
The momentum and growth trades have outperformed by SO MUCH comparatively to other factors (especially in the last five years). The timing of this sell off + factor leadership change feels much more like a rebalance caught up in a profit-taking sell off than any other scenario. And I get it, allocators are not willing to stay the course after getting so lucky with a V-shaped market recovery. Just three months ago the financial news networks were still debating if we were in for a V-shaped, U-shaped, L-shaped or my favorite, W-shaped recovery. The prudent move is to punt; take some chips off the table and rebalance your positions to (hopefully) run the clock down for the rest of 2020.

Why invest without an endgame? If you do, that's not very Meta of you. Goal based investing has been one of the best ways to stay strong in hard times.

Going back to March 2020, the pandemic panic selloff was brutal… and for good reason! Coronavirus was novel and we had no idea how devastating is was going to be.

Focusing on your goals gives you strength to get through nasty bear markets. How do you actually do this though? Well, here is a few best strategies: curate your stock/ETF Wishlist, focus on the factors you can control, and make time for the non-investment parts of your life...you have those right? 😬

This wasn’t the first time we have had a black swan-esque event rock our investable markets and certainly it will not be the last. Nonetheless, let’s break down the three most helpful tasks you can focus on to get through the darkest of times.

1) Curate a Stock/ETF Wishlist: I use a couple websites for this. They are FINVIZ.com and koyfin.com. FINVIZ is great for paper trading portfolios and setting up target prices for securities. The key here is as the market drops you can watch your favorite stocks get closer and closer to your buy points. Additionally, FINVIZ will consolidate a TON of market data on to each page. Once you know where everything is you will have a substantial amount of data to help you with your stock selection and trades.

​Koyfin is a bit different and works best for my analysis after security selection. Additionally, if you like factor analysis and dissecting ETFs Koyfin is second to none. Every allocator I have introduced this software to has made it a part of their morning trading setup.
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Ok, so now that you have the tools. Play around with the screeners and start building your wishlist. Make a watchlist of all the companies you wish you could buy when the rest of the world is having a fire sale.

2) Focus On the Factors You Can Control: this section could be a whole post on its own (and will be future posted right here!. One example that isn’t as obvious as having an asset allocation, reducing trading fees, or setting up automatic periodic investments, is managing your asset location.

When you are Meta you definitely have a Traditional IRA and Roth IRA in addition to your brokerage account. Making sure that your riskier trades are in the brokerage or Roth and your dividend payers are in your Traditional will add many basis points of return to your long term averages (you track those right?). 😑

3) The Non-Investment Parts of your Life: Early on in my career as a professional allocator I made a point to save opinions from famous stock market personalities. I wanted to keep them accountable to their forecasts. PMs like Bill Gross, Peter Schiff, David Rosenberg, Richard Bernstein and Jeff Gundlach come to mind. And you know what I observed: the Allocators that were more successful started discussing non-investment themes and started using non-financial market information to shape their worldview. The least successful allocators doubled down on their flawed perspectives and try to cast doubt as their trades got further and further away from their price targets.

More importantly though, leaving your workstation behind to learn something new, to experience something grand or to help someone in need will be a much greater reward than trying to force yourself to find your next trade. And to be honest, that is exactly how a lot of botched trades find their way into your portfolio. Stepping away creates FOMO but you have to fight it.

With all that being said, what’s the Metagame? Well in this case it’s to make sure you never purposefully back yourself into a corner. Not if, but WHEN you Plan fails, having contingencies will give you something constructive to focus on. Do you like great business with prices 35%-50% off (YES!), do you like Roth conversions at much lower cost basis? (yes again) and do you love that roadtrip to Florida you've been putting off for years! ...now that's Meta.

Give yourself an opportunity to fight another day and be rewarded with the unbelievable returns of compound interest.


Music bed provided by: Meet Me @ The Altar

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​Why did you pick your trading platform? ...stop me when I lie.

Robinhood - You read on WallStreetBets that you can buy stocks with 'other peoples money' and that sounds like a smart strategy to get rich quick. You almost signed up with FanDuel instead.

Fidelity - You had a 401k that somehow turned into an IRA. You trade once every two years. You calculate your investment gains on your invested balance because your cash drag would lower your returns by 600 basis points. You use the Stocks app on your iPhone for all your market news.

Ameriprise - Your brother-in-law used to work here (U-4 filing makes him unhire-able). You are not aware that you are paying a 2% wrap fee on your account that "doesn't seem to grow much". You might actually have an IUL policy as well.

Charles Schwab - You are on the west coast and are a Fidelity investor and don't know it. You heard that reading 10-K's is what the smart money does. You are thinking to FIRE but can't find a low cost of living city with good sashimi.

Wells Fargo Advisors - You got a $SBUX gift card for making the initial appointment. You called the service center to complain about an annual maintenance fee and demanded a reimbursement. You told your friends that your account did great during the last bear market not realizing that you actually own a fixed index annuity.

eTrade - You watched Dave Portnoy lose millions on $LULU stock and thought you could do better. You got a Reg D notice in your first week of trading. You are thinking to ACAT to WeBull because you get 'two free stocks'.

Merrill Edge - You think research is important. Your Advisor told you that this is your 'play account' and that they didn't want to manage it. In reality, the balance is under 100k and filling in an ACAT might make them miss their tee time.

Interactive Brokers - You are 'pro-sumer' and you want the best and know just enough to be dangerous (to your net worth). You have been on the wrong side of a $VXX trade multiple times. You feel proud when you see $IBKR commercials on CNBC.

Invesco - You are a teacher that had an Oppenheimer 403(b). You leave your account at Invesco because you cannot figure out the paperwork to rollover the funds. The 1.35% expense ratios for closet index funds sounds reasonable because the nice man in the cafeteria twenty years ago said it was.

Pershing - You aren't really sure where your money is. You feel that you are billed for every conceivable transaction. You own a balanced mutual fund C share and get mailed statements.

TD Ameritrade - You think you are smarter than all the other traders. You threaten to leave them if Schwab messes with Think or Swim. You follow Downtown Josh Brown on Twitter and took a screenshot of the time he liked your comment.

Tradestation - You are a home gamer and $IBKR seemed expensive. You don't really understand the difference between trading and investing. You think you can market time a margin loan at 'the bottom' to make up for your previous trading errors. Your trading setup rivals many Twitch gamers.

Vanguard - You read Warren Buffet's Annual shareholder letters and bought 'Security Analysis' by Ben Graham but didn't really understand it. You liked what you read about Roboadvisors in an article in Investor's Business Daily but you still think they are somehow a scam. You have contemplated a Roth conversion of your IRA for the last five years.


So what is the metagame? You need to know yourself as an investor/trader. WINNING AT INVESTING IS ONLY POSSIBLE IF YOU CAN MANAGE YOUR OWN BEHAVIOR. Stay in your lane.

​Music bed provided by One Up

I know I am way late to watching Stranger Things 3 but it was so worth the months of it lingering on 'My List' on $NFLX. The whole aesthetic of the series is warming and makes me want to move to a midwestern small town in an 80s time warp. Or maybe that is exactly what the The Mind Flayer wants me to feel.

GDP data came out today and saying it wasn't good would be a gross understatement. In fact, an estimated -4.8% GDP print was unfathomable just a few months ago. However, what was the markets reaction to this lower than expected result? Circuit breaker? Nope. Retest the 3/24/2020 lows? Not quite. $IVV gained +2.61% and $IJR rallied +5.58%. 😑

This is what I call the Upside Down. The place where bad news is positive and negative headline blinders are essential personal protective equipment. The notable part of this moment where 'bad news is good news' isn't that it exists, but that there are a lot more moments like this than investors want to believe.

Investors by and large want to believe that the investable markets are rational, logical and deliberate in their movements...and sometimes they are. But there is also the Upside Down where $BA rallies after hours on news that their bonds got downgraded to BBB- (just one notch above junk status). To use someone else's words: The market can remain irrational longer than you can remain solvent. -- John Maynard Keyes

​This is why a financial plan is required to be a successful investor and why a buy AND sell discipline are required for a successful trader.

So what is the Metagame right now? I would say it is scaling back to investments you actually want to own. Did you buy $SPCE because it was the next $TSLA? Did you buy that Emerging Markets ETF ($EEM) because 'it's cheap'? You may want to gut check those bets. #GetBacktoBasics

So to answer my original question, how long will we be in the upside down? ...I dunno, ask Barb.

Music bed provided by INTERCOM

It only took a global pandemic for this blog to take shape...and a little help from some friends. Please enjoy. 👍 

​Music bed provided by Oliver.