A framework Guo Jia used to assess Cao Cao’s strength versus Yuan Shao’s strength during the period of the three kingdom. This is an alternative measure to the modern day GDP measure which has been documented to be in use by the Chinese CCP government.
Advice to Cao Cao
- Yuan Shao is overmuch devoted to ceremony and deportment; while you are sympathetic and natural; this is an excellence in conduct.
- He is antagonistic and drives; you are conciliatory and lead; so you have the advantage of popular approval.
- For many years the government has been lax, and he makes it more so; you strive vigorously after efficiency; this is the excellence of able administration.
- He is outwardly liberal but grudging at heart, and too given to nepotism; you appear exacting, but you understand and use people after their ability; this is the advantage of correct appreciation.
- He is a visionary but lacking in decision; you are a man of prompt decision and direct action; this is an advantage in policy.
- He loves to gather about him people of renown; you treat people as you find them regardless of their reputation; this is where you excel in moral virtue.
- He is compassionate to those at hand, but careless about those out of sight; your care is all-embracing; this is where you excel in humanity.
- He lends a ready ear to calumny and is misled; you may be flooded with evil counsel, but you preserve independence; this is where you excel in perspicacity.
- His sense of right and wrong is confused; your appreciation is accurate and clear; this is where you excel in administrative capacity.
- He loves the make-believe force, but is ignorant of military essentials; you would overcome with far inferior numbers as you possess military genius; this is where you excel in war.
- The hundred year marathon, Michael Pillsbury
- Book of Wei
This post talks in detail about the technical aspects of our exit strategy
- 5% capital gain or price reaches 30 day moving average
- -2.5% capital loss
- position held more than 2 week
This post documents how we identify negative macro downtown.
- When more than 20 companies within the mega cap area experience large dip within a week, it is a good indication that macro economics trend has shift
- Verify by cross referencing with SQP, QQQ and ^RUT
- During this scenario, it might make sense to shift position into SRTY
The central banks announced they stepped in to prop up the market if situation deteriorates with the ongoing trade war.
The world’s leading indicator
The Russell index observed to have started stabilization as recent as the 31st of May 2019
The trend followers
Down trend persisted for the Nasdaq well till 4th June 2019
Down trend persisted for the S&P 500 well till 4th June 2019
The leading indicator for Asia
The Nikkei Index closely mirrored the Russell 2000 index
Other Asian indexes
The charts for the Asian markets closely mirror the SnP charts with Singapore being most responsive amongst
- As with micro-trend, first determine if the root cause of the negative macro trend is structural as opposed to transient
- When trading on macro trends it is definitely more efficient to utilize industry wide indexes as opposed to individual stocks positions. This is due to the noise within the channel when dealing from micro events.
- Next step is to consider the exit strategy for an index position
Shorting outcome for 2019 US/China trade war
Below are a list of transactions on the short side of the market with the attempt to ride this negative macro trend.
Positions were picked based on occurrences of large dip scenarios in the prior few weeks.
This strategy under performed when compared against simply shorting the SnP index during the same period.