EP: 132 Bonds, Bubbles, and Risk Parity

Futures Radio Show

00:00 / 26:48

Guest:

Kevin Muir

Macro Tourist

Record Date: 5/24/17

Traders,

Today I spoke to a man that started at the Bank of Montreal on the investor line desk before he graduated from college. Moved to Chicago to work in the Demark pit and then moved to Toronto to work at RBC in charge of the equity index derivates book. Now he is an independent trader that writes a fantastic blog called The Macro Tourist, his name is Kevin Muir. [bctt tweet=”#FuturesRadio ‘If you were looking for an accident to happen, it’s more likely to happen in the bond market rather than the stock market” username=”kevinmuir”]

I had a fascinating conversation with Kevin. We talked about some of the reasons he believes the stock market is rallying and Kevin entertains the idea that the next move in the market may be a melt up instead of a meltdown. We talked about why people tend to boo bullish market blog posts and praise people for writing bearish market pieces.

We talked about Bond risk parity and he explains what Paul Tudor Jones and Ray Dalio said about it. Not to mention he thinks that Axe from billions would have had bond risk parity! Finally we talked about a scenario that may end the calm bond markets.

Kevin is an extremely smart guy whos blog I truly enjoy reading for insight on the markets. It was great to get a chance to speak with today and I know you will learn a lot from today’s show with Kevin. Thank you all for listening and please and enjoy this episode.

Takeaways:

He says this is the most “un-fun” bubble, and why the market is rallying based on the misconceptions that people are believing.
Kevin entertains the idea of a “meltup”, instead of a “meltdown”.
Why it’s so easy to get applause when writing bearish pieces, but bullish pieces get booed off the stage.
The bond risk parity explained.
The end of calm bond markets.

Rapid Fire:

How has your trading evolved?
- I’ve become more patient.
The moment trading just clicked for you?
- It’s never clicked. I’m constantly readjusting.
1 source you spend your time on?
- Twitter properly curated.
Favorite Book About Trading:
- Reminiscence of a stock operator. Balance sheet recession – RichardKoo.
Favorite Movie About Trading:
- Trader PBS documentary. Paul Tudor Jones.
Best Advice Ever Received About Trading:
- Slay your dragons while their small.
Advice to Give to Others About Trading:
- Be passionate and keep learning, it’s always changing.
If you weren’t a trader you’d be what?
- Computer Programmer.