Yong Jae Kim

"Midcap Tech Stocks and ETFs: What Lies Beneath" - TalkMarkets article using ValuEngine Inc. data, stock and ETF reports along with data pulled from ETFdb.com Inc, a VettaFi company. Please read article here: https://lnkd.in/ez4rhPQY However, as impressive as the rise of NVDA has been, opportunities in the tech sector clearly stretch below this one stock and its peers in the “Magnificent Seven.” With an eye towards potential broadening of the tech sector opportunity set, this blog focuses on a few selected Technology ETFs, three of which target a broad segment of ETFs, most of which are not in QQQ, followed by a quick look at a few technology stocks most highly rated by ValuEngine. Featured ETFs include: First Trust Technology AlphaDEX (now called StrataQuant) Fund (FXL) Invesco US S&P SmallCap Information Technology ETF (PSCT) Invesco Nasdaq Next Gen 100 ETF (QQQJ) Featured stocks include: ServiceNow (NOW); Pinterest (PINS); DoorDash (DASH); Snap Inc. (SNAP) and Western Digital. Another company that we rank a strong Buy in this group but didn't make the market cap cut for the article. is Toast (TOST). Overall, our predictive model and valuation model both are bearish on technology in general but they’ve unearthed a few hidden gems. Investors interested in staying in the sector but paring positions in Apple, Nvidia and Tesla may find some of these stocks worth investigating. However, such investors should fasten their seatbelts as all of these stocks are very volatile and many experts predict increased market volatility for the next 6 months. Thanks for assistance to Rajesh Jain; Paul Henneman and Trish Twining. Shouts to: Patricia Baronowski-Schneider;Michael Cronan; Jeff West; Jerilyn Klein; Dorothy Hinchcliff; Peter Wright; Wayne Nef; Mary Ann Bartels; Deborah Fuhr, CFA fellow; Lauren Davis, M.A.; Gayathiri Sri Rangan; Fernando Domecq; Anchal Tandon; Gareth Parker; Elle Worrell; Anil Ghelani, CFA; James Pacetti; Elisabeth Kashner, CFA; Cinthia Murphy; Lara Crigger; Todd Rosenbluth; Sam Stovall; James Eagle; James Picerno

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Long-Term Treasuries Calendar Effects: TLT Seasonal Trading Strategies In this post, we look at some specific calendar effects in long-term Treasuries. We backtest some calendar effects by using the ETF with the ticker code TLT which tracks the 20 year Treasury bonds. It turns out the first seven trading days of the month produce strong negative returns, while the rest of the month has doubled the returns of buying and holding the TLT. We backtest the following trading rules: * We buy at the close on the seventh last trading day of the month. * We sell at the close of the last trading day of the month. * We are not using calendar days but trading days. They are, most of the time, slightly different. The strategy and its trading rules return the equity curve (shown below) since TLT’s inception until today. Want to learn more about the strategy? Check comment 👇 #TradingStrategies #Backtesting #BondTrading #SeasonalTrading #Investing #FinancialMarkets

Long-Term Treasuries Calendar Effects: TLT Seasonal Trading Strategies In this post, we look at some specific calendar effects in long-term Treasuries. We backtest some calendar effects by using the ETF with the ticker code TLT which tracks the 20 year Treasury bonds. It turns out the first seven trading days of the month produce strong negative returns, while the rest of the month has doubled the returns of buying and holding the TLT. We test the following hypothesis and make the following trading rules: * We buy at the close on the seventh last trading day of the month. * We sell at the close of the last trading day of the month. * We are not using calendar days but trading days. They are, most of the time, slightly different. The strategy and its trading rules return the equity curve (shown below) since TLT’s inception until today. Want to learn more about the strategy? Check comment 👇 #tradingstrategies #BondTrading #TLT #TreasuryBonds #TradingStrategy #SeasonalTrading #Backtesting #Investing #FinancialMarkets

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Why do so many fund managers struggle to beat the S&P 500? It's a question that keeps investors up at night, right after they wonder if they left the stove on. The truth is, the S&P 500 is like that one friend who always aces everything effortlessly—representing the largest and most successful companies in the US and making it a tough act to follow. Even if we assume management fees and trading costs are zero, which is about as likely as finding a unicorn in your backyard, the efficient market hypothesis suggests that it’s nearly impossible to consistently beat the market through stock picking. The S&P 500 reflects the collective knowledge and expectations of all investors. And let's face it, no amount of experience or luck is going to let fund managers outsmart a market that’s like a crystal ball with a college degree. So, many investors find that passive investing provides a more reliable path to long-term growth. Passive funds benefit from lower costs and a straightforward strategy, often translating to better long-term performance. It’s like choosing a reliable Toyota over a finicky Ferrari less flashy, but it gets you where you want to go without constant headaches. #investting #ValueCreation

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Major Shift in the Quant Industry: FTC Bans Non-Competes! The Federal Trade Commission (FTC) has just rolled out a landmark decision to ban noncompete clauses, signaling a monumental shift in employment dynamics, particularly within the high-stakes quant industry. Traditionally, noncompete agreements have been crucial for firms in safeguarding their proprietary strategies and information. In the quant world, where intellectual capital is a core asset, these agreements have prevented employees from joining competitors, thereby protecting trade secrets and maintaining stability. However, the FTC's new rule is set to dismantle these barriers, championing greater worker mobility and potentially boosting wage growth. This regulatory change could catalyse a more fluid job market, where quant professionals can move where their skills are most valued, thereby possibly driving faster innovation and operational efficiencies across the board. For quant firms, eliminating noncompetes means pivoting towards alternative methods to retain talent and protect intellectual property. Enhanced workplace cultures, competitive compensation packages, and robust legal safeguards will become even more crucial. 𝗗𝗶𝗱 𝗬𝗼𝘂 𝗞𝗻𝗼𝘄? Around 30 million U.S. workers are currently bound by a non-compete! 𝗞𝗲𝘆 𝗣𝗼𝗶𝗻𝘁𝘀 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗙𝗧𝗖 𝗥𝘂𝗹𝗶𝗻𝗴: - Existing noncompetes with senior executives can remain, but firms are restricted from forming new ones or enforcing existing ones outside this group. - For sit-out periods to be enforceable, firms might need to pay an employee's total compensation. How does that work with a % of trading when you're not trading... who knows! - Despite its potential benefits, this new rule faces opposition, notably from The US Chamber of Commerce, which has vowed to challenge the regulation legally. Stay tuned as this develops! #quantitativefinance #fintech #regulation #FTC #careerdevelopment #hedgefunds #quantitativeresearch Here's the link to FTC: https://lnkd.in/dFAz2VqE https://lnkd.in/dXN6fJyG

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Should developers measure #ROCE rather than #ROE? In short, yes. ROCE, or Return on Capital Employed, shows how effectively a company uses its capital— debt and equity—to generate profits. Unlike metrics such as Return on Equity (ROE), which only considers equity, or Return on Assets (#ROA), which only focuses on assets, ROCE is calculated by considering both debt and equity, providing a balanced and comprehensive view into profitability and capital efficiency. At a time when every penny counts, ROCE is a powerful tool for assessing a site's efficiency and profitability, ensuring that every penny invested is working hard. A higher ROCE value usually implies better investment quality, as it suggests that a company can generate a higher return on each unit of capital employed. As more #developers (and #lenders) move towards using ROCE to measure the viability of their sites and make informed investment decisions, Brickflow now shows ROCE in the search results against every #DevelopmentFinance and #RefurbishmentBridging search.

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0DTE options, known for 'lottery-like payoffs,' now make up about 50% of S&P 500 options trading volume. Garrett DeSimone, head of quantitative research at OptionMetrics warns of the risks: 'You can go completely broke, but there are occasional Lotto-sized payouts.' Despite their rapid growth, concerns linger about potential market destabilization if they expand to individual stocks. Read the full article below. #optionstrading #tradingstrategies #optionmetrics

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Bloomberg makes proprietary alternative data available to quants Bloomberg has made its proprietary Bloomberg Second Measure (BSM) transaction data analytics feeds available via Bloomberg Data License. Data professionals and quantitative researchers can now connect this alternative dataset with Bloomberg’s more traditional Data License content. #data #datasets #markets #trading #finance #GlobalTrading https://lnkd.in/eMvGdWzi

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👨‍👩‍👧‍👦 The role of (U.S.) retail investors comes to fore again in a WSJ article, pointing out, "Trading activity at Charles Schwab, Morgan Stanley and Robinhood reaches highest levels since early 2022." (Link below). https://lnkd.in/eRq4Ykfb 📈 I checked out Schwab's website and found they have an index to follow the retail investors' activities. Schwab writes, "Introducing the Schwab Trading Activity Index, or the STAX. A proprietary, behavior-based index designed to indicate the sentiment of retail investors." https://lnkd.in/ejC2XR_e 🏹 Seems as if it would be well worth while keeping abreast of this update. Might be an idea to add the Robinhood index as well. https://lnkd.in/edbqSjA2 🛀 We live in interesting times. Younger people are showing a clear preference for the unorthodox, and as they're the ones earning the bigger bucks, their activity as retail investors is already having a greater impact on markets than for previous generations. Put off by fees, suspicious of advice but vulnerable to social media trends the impact of younger DIY investors is bound to increase. 🔭 Personally, my 'vision' is based on the book 'Zoomers' by Gregory Benford. A futurist depiction of a world lived in by millions upon millions of traders literally suited up (sensor suits, AR goggles - the works) riding market waves, surfing three dimensional curves and graphs - exiting before the wave collapses. It's a T+0 world, where every exit is matched by a new position.

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Over the past couple of months, we at Leverage Shares have talked a lot about Tesla, probably one of the biggest high-conviction stocks out there. It was one of the worst-performing stocks in Q1, with Q2 not shaping up to be *substantially* better. While sales volumes lag, Elon Musk does an interesting switch: he asserts that the company is an "AI Robotics" firm rather than a carmaker, despite no history of achievements in the former (yet) and plenty in the latter. And then there's the matter of the disappearing "affordable" car... or has it really disappeared? (spoiler: most likely yes). Read more about the line of reasoning I pursued in the course of my commentary that appeared on MarketWatch and Reuters, among others. https://lnkd.in/gzc7Be-T #tesla #financialmarkets #EV #electriccars #marketcommentary #macroeconomics

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UPDATE on the CFT-Max (J1939) Data fields now include: Peak flows and total flow volumes since last reset as well as the current flow and flow averaged / 500 ms. Knowing more Flow Data increases the Value of the Data!

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If we’re to use history and not consensus as a guide, not only does the 10YR-3M yield curve inverting extremely reliable in predicting recession - more so than 10YR-2YR spread - but it appears to suggest the longer duration the 10YR-3M yield curve remains inverted, the harder the landing for the US equity market. All 9 times the 10YR-3M yield curve inverted since 1927, all ended in a hard landing for the US economy and consequently the S&P 500 observed major drawdowns. There is no mid-1990’s exception, the 10YR-3M spread never inverted then unlike the 10YR-2YR. The chart below shows all 9 cycles with the corresponding # of days inverted and S&P 500 cycle peak to trough decline. I wouldn’t pay much attention to the determining coefficient R2 value, considering it’s a simple linear regression with only 9 data points representing different cycles where variance is expected. That said, we can see a very clear relationship where the longer the 10YR-3M spread remains inverted, the more disappointment market participants ultimately realize. Unfortunately the current 10YR-3M spread inversion duration just surpassed the GFC and is now the second longest we’ve seen this yield curve inverted. The only longer inversion? In 1929 preceding the Great Depression, where the S&P 500 observed nearly a -90% peak to trough obliteration. We still have 160+ days until we hit that duration and in no way am I suggesting I expect those kind of unimaginable consequences today. At the same time, the phrase “history never repeats but often rhymes” has definitively shown to have truth. Even if you’re not a believer in the yield curve, I think it’s a concerning dynamic at the very least. Time will tell. Happy Friday! Sources: OVOM Research, Bloomberg #Research #Economy #Markets #Finance #Macro #Equities #YieldCurve

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DXY Strength Weighs on Crypto, ETH ETF Expected Early July 📈💪🏻 Bloomberg ETF expert Eric Balchunas moved up his target date for the ETH ETF launches to July 2nd, based on the pace of interactions between the SEC and ETF issuers. It appears that the SEC staff has already sent issuers comments on the S-1s, and that these comments are relatively light, indicating they could be addressed this week. Get market update videos, institutional-grade research, and crypto strategy from Sean Farrell , only at FS Insight. 🙌🏻🤩 https://lnkd.in/ePxpd5vg

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QVR Advisors' Steven Richey, co-chief investment officer and head of convexity, said he is happy that there is systematic call selling and put selling of 0DTE options. “We use 0DTEs to hedge so we’re always long those options. We focus on one-to-two month at-the-money options because of the systematic call sellers that come in the market every day,” he said. Richey added that he believes that 0DTEs are limiting intraday volatility and probably will extend market moves over time. --- Have Option Selling Strategies Suppressed Implied Volatility? See here: https://lnkd.in/g6GA5vbK

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📊 𝗘𝘅𝗽𝗹𝗼𝗿𝗶𝗻𝗴 𝘁𝗵𝗲 𝗖𝗼𝗿𝗿𝗲𝗹𝗮𝘁𝗶𝗼𝗻 𝗕𝗲𝘁𝘄𝗲𝗲𝗻 𝗡𝗩𝗜𝗗𝗜𝗔 𝗦𝘁𝗼𝗰𝗸 𝗮𝗻𝗱 𝗗𝗲𝗣𝗜𝗡 𝗧𝗼𝗸𝗲𝗻𝘀 Recent data unveils a compelling correlation between NVIDIA's stock performance and the dynamics of leading DePIN tokens. While some might view this linkage with skepticism concerning long-term sustainability, the unique pace of the crypto industry—where a year can equate to a decade in traditional markets—suggests that short-term, this connection may actually benefit the DePIN sector. 🔗 𝗪𝗵𝘆 𝗧𝗵𝗶𝘀 𝗠𝗮𝘁𝘁𝗲𝗿𝘀 Unlike other crypto sectors, DePIN is uniquely tied to real-world fundamentals through actual supply and demand dynamics, not just theoretical concepts. This connection is rare in the crypto universe and could signal a promising avenue for growth and stability. 🚀 𝗔𝗜'𝘀 𝗥𝗼𝗹𝗲 𝗶𝗻 𝗙𝘂𝗲𝗹𝗹𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱 With AI's explosion in popularity, the demand for computing power and data storage has surged—areas where DePIN aims to make significant improvements. As AI continues to unfold its potential, the constant demand for these resources could propel the DePIN sector to new heights. ⚖️ 𝗦𝘂𝗽𝗽𝗹𝘆 𝘃𝘀. 𝗗𝗲𝗺𝗮𝗻𝗱 𝗗𝘆𝗻𝗮𝗺𝗶𝗰𝘀 Typically in tech, demand and supply evolve in tandem. However, AI has sparked an extraordinary demand, while DePIN is just beginning to scale up its supply capabilities. This unique mismatch could lead to exciting opportunities within the sector, particularly as new projects emerge. 🔍 𝗝𝗼𝗶𝗻 𝘁𝗵𝗲 𝗖𝗼𝗻𝘃𝗲𝗿𝘀𝗮𝘁𝗶𝗼𝗻 The DePIN sector stands out this cycle, and its trajectory is worth watching closely. What are your thoughts on DePIN? Is it a viable innovation or merely a narrative? 👇 𝗜’𝗱 𝗹𝗼𝘃𝗲 𝘁𝗼 𝗵𝗲𝗮𝗿 𝘆𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗯𝗲𝗹𝗼𝘄! 𝗟𝗲𝘁'𝘀 𝗱𝗶𝘀𝗰𝘂𝘀𝘀 𝘁𝗵𝗲 𝗳𝘂𝘁𝘂𝗿𝗲 𝗼𝗳 𝗗𝗲𝗣𝗜𝗡 𝗮𝗻𝗱 𝗶𝘁𝘀 𝗶𝗺𝗽𝗮𝗰𝘁 𝗼𝗻 𝘁𝗵𝗲 𝘁𝗲𝗰𝗵 𝗮𝗻𝗱 𝗰𝗿𝘆𝗽𝘁𝗼 𝗹𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲𝘀.

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So one thing that I am doing is to try to figure out how to move bitcoin into or out of the ETF's. This is in preparation for my panel at Bitcoin Asia on 5/9. What I would *like* to say is *HK bitcoin ETF's are totally awesome and here are the super-cool things you can do with them*, but I think what I am more likely to say is *Okay, people in HK are trying, but they haven't quite got it completely working, but there is some cool stuff coming down the pipe, that's not 100% ready*. The two cool things that you can do if this all works is * get a bitcoin visa * get professional investor status In order to get an investment visa and to get professional investor status you have have money invested in certain types of securities and cash, and having bitcoin set up on HK ETF will qualify. Honestly, Hong Kong is a city of middlemen, so part of the exercise is so that people get paid shuffling papers. So I am not surprised that you have to go through a ton of bureaucracy to get this done because at each rubber stamp you have to pay someone to give you the rubber stamp. The good news is that all the middlemen know that if they charge too much you are going to be flying off to Singapore or Dubai and they get nothing. What *will* happen is that someone will start a business as a consultant, and say "okay pay me X and I will get all of the papers signed and I will take care of all of the stuff." My interest in making this work is not totally altruistic because if I can figure out how to line up everything, I might be the guy that you pay to get everything set up. I should point out that "go to someone and they worry about the paperwork" is how banking used to be, and how banking really *should* be. But the trouble is that bankers are now basically agents of the government and work for the tax authorities more than they do for you, and so ironically they can't get into this business even if they wanted to which they really do.

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So right now with bitcoin ETF's, I am trying to get my bitcoin into an ETF. The big holdup is that I happen to be a US citizen, and so I am literally talking to some senior people in the primary dealers to see about opening an account. The thing that I would *really* like to do is post a blog saying 1) this is how you get your bitcoin into and out of the HK Exchange 2) here are the rules for opening an account One thing that I don't want to do is to get any special treatment. If it turns out that they will open an account for me as a US citizen as a special favor from senior management, its not going to work because 1) I don't want to owe people favors and 2) it means I can't publicly say go to broker X if you are a US citizen. In at least one situation, customer service flat out told me that broker X will not open accounts for US citizens, and I am literally talking with senior management to see what can be done. One thing is that once I talk with senior management, I can talk with their legal and compliance people and make the argument to them that they are okay under US FATCA rules (specifically see page 34 section III. A. of the US-HK FATCA agreement dated 2014-11-13). Also, this is *CRAZY*. You are just not going to get crypto people to sign onto to ETF's if it take s a month to onboard an account. With any crypto exchange, you either get an account in two hours, or you get a note saying flat out to go elsewhere. However, if it takes a month to onboard me, and then you develop the processes so that anyone else gets onboarded in two days and then two hours, then there is $$$$$ at the end of the rainbow.

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