One more Trumpet

I think it is highly probable we will get one more rally before the markets take a serious breather. I am flat the market with you can argue some negative beta slant via my long VIX.

I want to add to this position if we get another rally.

On the other hand I am reading an amazing book on Why Minsky Matters by Prof Randall. I will be writing more about this in coming weeks as I find the time to finish reading it and completing the TV series Sons of Anarchy which I have loved but want to finish already. The story line is too drawn out but I love it nonetheless.


Last Day of the Year

It has been a very quiet year for me on the Sefirot front. I have to admit almost all my energy has been channelled towards growing PsyQuation as a business. However this doesn’t mean I haven’t reached major new heights in my goal towards self discovery. In fact this year has been one of my most difficult years dealing with extreme uncertainty.

What is interesting is the test of uncertainty brings forward ones quest for faith. The effect  of not knowing how the future will turn out forces one to strip back ones ego to feel secure in the knowledge that even if everything one hoped for doesn’t turn out and I am left with nothing, I still left with “ME” and I am learning to accept that isn’t so bad either.

If I can summarise the way things have been for me in 2016 on the business front. We have built an incredible software platform and team. However we have failed to communicate our softwares benefits to the trader community and we haven’t solved our business model solution. I believe that even though it has been a tremendously frustrating year and one filled with anxiety it may have been a necessary “evil” to have such a strong foundation to build a truly meaningful company into 2017 and beyond.

Onto the markets, 2016 has for me been a continuation of the insanity of a zero interest environment. The low interest rate environment has inflated the stock markets as one could expect for some time as the natural inclination if the banks aren’t paying you any interest is to speculate in the stock market in the search for yield and return. I have slowly reduced exposure to the market throughout the year as I simply could not get constructive on this market because I believe the world economies are sick, they are swimming in a sea of debt that the central banks and governments have not addressed, in fact they have added to the already existing debt problem by creating even more debt.

What I continue to learn through each new phase of the market cycles is that nothing behaves in the time frame you anticipate. The economic theories I have subscribed to are still very much in play, it is just understanding the way the mass psychology will react to the information in the short term that will forever evade prognosticators. Please refer to the section below to see how wrong experts got it in build up to the Great Depression. In conclusion I believe the world economies are on the edge of a precipice and in fact the political stability of the world seems to be echoing the economic instability. The future is looking very unpleasant. I think we are due to experience economic and political pain that we have not experienced in many decades. The GFC was just a precursor. The psychic energy of too easy needs to be balanced with too hard, so this phase of easy money will need to swing to a point where people can no longer withdraw “equity” out of their home mortgage. Sorry folks the BEARman is as bearish as ever.

Performance Summary

The stated goal and objective of the Sefirot Freestyle Fund is to outperform the S&P500 on a risk adjusted basis. With one trading day left for the year, I can say that Sefirot has outperformed with a better Sharpe Ratio 0.30 versus the S&P500 0.26


Clearly we haven’t achieved the same $ & % profits but this has never been the goal of this fund. Despite people thinking I am a risk taker the truth is the complete opposite.


Here is a post from someone else illustrating my point how experts may know a lot about their field but when it comes to timing the markets there are no experts.

History Shows Why Prognosticators Should Be Discounted

(click here if chart is not observable)

1927-1933 Chart of Pompous Prognosticators

1.  “We will not have any more crashes in our time.”
– John Maynard Keynes in 1927

2.  “I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
– E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928

“There will be no interruption of our permanent prosperity.”
– Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928

3.  “No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment…and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”  – Calvin Coolidge December 4, 1928

4.  “There may be a recession in stock prices, but not anything in the nature of a crash.”
– Irving Fisher, leading U.S. economist , New York Times, Sept. 5, 1929

5.  “Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
– Irving Fisher, Ph.D. in economics, Oct. 17, 1929

“This crash is not going to have much effect on business.”
– Arthur Reynolds, Chairman of Continental Illinois Bank of Chicago, October 24, 1929

“There will be no repetition of the break of yesterday… I have no fear of another comparable decline.”
– Arthur W. Loasby (President of the Equitable Trust Company), quoted in NYT, Friday, October 25, 1929

“We feel that fundamentally Wall Street is sound, and that for people who can afford to pay for them outright, good stocks are cheap at these prices.”
– Goodbody and Company market-letter quoted in The New York Times, Friday, October 25, 1929

6.  “This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
– R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929

“Buying of sound, seasoned issues now will not be regretted”
– E. A. Pearce market letter quoted in the New York Herald Tribune, October 30, 1929

“Some pretty intelligent people are now buying stocks… Unless we are to have a panic — which no one seriously believes, stocks have hit bottom.”
– R. W. McNeal, financial analyst in October 1929

7.  “The decline is in paper values, not in tangible goods and services…America is now in the eighth year of prosperity as commercially defined. The former great periods of prosperity in America averaged eleven years. On this basis we now have three more years to go before the tailspin.”
– Stuart Chase (American economist and author), NY Herald Tribune, November 1, 1929

“Hysteria has now disappeared from Wall Street.”
– The Times of London, November 2, 1929

“The Wall Street crash doesn’t mean that there will be any general or serious business depression… For six years American business has been diverting a substantial part of its attention, its energies and its resources on the speculative game… Now that irrelevant, alien and hazardous adventure is over. Business has come home again, back to its job, providentially unscathed, sound in wind and limb, financially stronger than ever before.”
– Business Week, November 2, 1929

“…despite its severity, we believe that the slump in stock prices will prove an intermediate movement and not the precursor of a business depression such as would entail prolonged further liquidation…”  – Harvard Economic Society (HES), November 2, 1929

8.  “… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.” – HES, November 10, 1929

“The end of the decline of the Stock Market will probably not be long, only a few more days at most.”
– Irving Fisher, Professor of Economics at Yale University, November 14, 1929

“In most of the cities and towns of this country, this Wall Street panic will have no effect.”
– Paul Block (President of the Block newspaper chain), editorial, November 15, 1929

“Financial storm definitely passed.”
– Bernard Baruch, cablegram to Winston Churchill, November 15, 1929

9.  “I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and that during this coming year the country will make steady progress.”
– Andrew W. Mellon, U.S. Secretary of the Treasury December 31, 1929

“I am convinced that through these measures we have reestablished confidence.”
– Herbert Hoover, December 1929

“[1930 will be] a splendid employment year.”
– U.S. Dept. of Labor, New Year’s Forecast, December 1929

10. “For the immediate future, at least, the outlook (stocks) is bright.”
– Irving Fisher, Ph.D. in Economics, in early 1930

11.  “…there are indications that the severest phase of the recession is over…”
– Harvard Economic Society (HES) Jan 18, 1930

12.  “There is nothing in the situation to be disturbed about.”
– Secretary of the Treasury Andrew Mellon, Feb 1930

13.  “The spring of 1930 marks the end of a period of grave concern…American business is steadily coming back to a normal level of prosperity.”
– Julius Barnes, head of Hoover’s National Business Survey Conference, Mar 16, 1930

“… the outlook continues favorable…”  – HES Mar 29, 1930

14.  “… the outlook is favorable…”  – HES Apr 19, 1930

15.  “While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”
– Herbert Hoover, President of the United States, May 1, 1930

“…by May or June the spring recovery forecast in our letters of last December and November should clearly be apparent…”  – HES May 17, 1930

“Gentleman, you have come sixty days too late. The depression is over.”
– Herbert Hoover, responding to a delegation requesting a public works program to help speed the recovery, June 1930

16.  “… irregular and conflicting movements of business should soon give way to a sustained recovery…”  – HES June 28, 1930

17.  “… the present depression has about spent its force…” – HES, Aug 30, 1930

18. “We are now near the end of the declining phase of the depression.”- HES Nov 15, 1930

19.  “Stabilization at [present] levels is clearly possible.” – HES Oct 31, 1931

20.  “All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.” – President F.D. Roosevelt, 1933

Colin J. Seymour, June 2001
20 June 2001

Calling a Top

I have quietly sat by while the markets have continued to climb to incredible heights.

Selling my remaining 50 SPY at the market open, which will leave me with a short bias to the market. I hope to write a summary of my year from a cruise ship next week in the south pacific islands.

The Cultural Complex

I have a Jungian based book in my library called The Cultural Complex compiled by Thomas Singer and Sam Kimbles. I was delighted to hear that Tom Singer was visiting and speaking to the Jungian Society in Sydney, so last night I went along to his talk. Tom is a psychiatrist and a Jungian analyst, his area of interest is how cultural complexes manifest in different countries. It is always a kick for me to meet the author of a book that has had a profound effect on my life (2 other come immediately to mind – see below*)

This is a subject that has tremendous meaning for me, as a few years ago I coined the term The Market Complex to describe my world view on how the cultural complex plays out in our trading world.

Before we go further lets understand what the great man, Jung, had to say on the complex:

The complex has a sort of body, a certain amount of its own physiology. It can upset the stomach. It upsets the breathing, it disturbs the heart – in short, it behaves like a partial personality. For instance, when you want to say or do something and unfortunately a complex interferes with this intention, then you say or do something different from what you intended. You are simply interrupted, and your best intention gets upset by the complex, exactly as if you had been interfered with by a human being or by circumstances from outside. (Jung 1936/1976)

The idea behind the cultural complex is that there is another level of complex that exists within the psyche of the group. From here you can see where I am going with my thesis of The Market Complex. Have you ever felt overwhelmed by an irrational force that drives your trading in an unexpected direction? These impulses are often attributed to neuro-chemical reactions operating at a primal level of brain function. However, they can also be attributed to the emotional charge of ideas that tend to cluster around an archetypal core shared by individuals belonging to a group.

These are big philosophical ideas rooted in a more esoteric branch of psychology so we don’t need to get bogged down in the jargon. The key point to walk away with is that the market as a collective can often behave in a way that makes no sense to ones own rational understanding, and even more alarming we can sometimes do things that almost feel like we are acting under the influence of an unknown force.


* Prof Burton Malkiel – A Random Walk Down Wall Street

* Prof Sanford Drob – Kabbalistic Visions: C.G. Jung and Jewish Mysticism & Reading the Red Book: An Interpretive  Guide to C.G. Jung’s Liber Novus.

Preparing for launch

First to get the trades out of the way selling 100 SPY at the open to lighten up my broad market exposure. I still hate this market and think it is expensive.

The bulk of my time and energy is now focused on the launch of on the 20th May. I will write more when my schedule allows it.

Herewith Sefirot Freestyle Fund performance to date, in terms of the stated goal we are winning with a Sharpe Ratio of 0.42 vs 0.11:



Feeling Disloyal

I am feeling terrible that I am not posting on this site, like I would like. I am however tweeting a lot these days and can be followed on @mickson

As we have just finished Feb I wanted to post our returns. On the positive side of things the fund is profitable; however the strength of this bounce/new high coming has surprised me. I continue to opt for a very most index exposure. I have been toying with buying some non-correlated instruments of an exotic nature, but I have decided to stay away from it and stick to my main objective of beating the S&P500 on a risk adjusted basis.

Lastly, I am currently reading Market Mind Games by Denise Shull who I had the pleasure of meeting in New York in December. I will reserve comments until I have completed the book, but I will say I am impressed with her mindfulness approach. I am just wondering if I can accept her overriding philosophy within a Jungian context. Until later….. launch scheduled for May and occupying almost all my attention.


New Year New Trade

It has been some time since we have done anything to the portfolio. We will buy 75 SPY @ the market open on 21 Jan.

The portfolio is doing really well having side-stepped the latest bout of volatility. We have no plan on getting too constructive on the portfolio. However, given the recent selloff there is some scope for a bounce of some nature to develop.

Reminder: the funds goal is to outperform the S&P500 on a risk adjusted basis.