23 Comments

Thanks for your thoughtful article.

I just looked up XRT on fidelity. It has over 500% shorted shares as of end of Feb.

I don’t know if this would warrants enough worry for the shorts? Thanks again.

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thanks rye. 500% is not low, but XRT has consistently had shorts % of shares outstanding >200% for the last decade...so not quite as extreme as it sounds

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Thanks. Interesting.

With inflation, negative wage growth, and very low consumer sentiment, it is hard to see how could retailers make a comeback in the near to medium term. Still, it makes uneasy to short this due to some chance of short squeeze. (I only recently discover your work)

If 500% short did not make this go down future, who are on the other side of the trade to buy these many shares and why? How to know if these bad news are already priced in? Because the shorts are crowded.

I don't have much experience in active investing, and if I can point to reasons to short this, I assume that I'm late to the party and the market has already take it into account. What's the flaw in my logic?

Sorry for the long winded question. I'm trying to learn.

From the chart, XRT/SPX, we can see there is clear levels. It is at mid level right now. From that perspective, it still has more downside.

Thank you!

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extremely useful. like the style too.

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Only been reading your comments for a few weeks Mr Blonde, and I'll say these short and direct pieces are better than 99% of the sell side research and Macro musing I read at work. Appreciate the content, even if don't agree with all of it. Impressive.

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thanks for the feedback and appreciate the compliment!

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Like everyone, I've been puzzling over where the world is at and where it might be headed. I have always tilted toward these types of stocks even though they aren't always growing and blowing - profitability matters, eventually. A large part of my holdings are already in Vanguard Dividend Appreciation and Healthcare. I have been researching quality factors and as I am drawn more to ETF's versus individual stocks I have been looking at QUAL, TTAC, COWZ, SYLD. That led me here and some great analysis - thanks so much!

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thanks for sharing here johnnyk! you might appreciate this post to add further insight to the benefit(s) of a quality tilt… https://stuckinthemiddle.substack.com/p/compounding-quality?s=w

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Excellent - thanks - I have spent the day reading through all of this. Really helpful and well presented.

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awesome, glad it was insightful

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First time caller, Long time fan Mr. Blonde. Been in markets for 30 years. Try to be fresh and not dogmatic in thinking. You are helping that process. Thank you Mr. Blonde. #makingadifference

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great to hear from you larry, appreciate the feedback!

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Why not more commodity exposed equities in the long side screen?

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the style factor screen is sector neutral...so part of the issue is small US universe of commodity stocks in the large cap universe. also, in my experience, commodity equities trade with very high correlation...not much difference in return between commodity stock 1 and commodity stock 10. better to trade ETF if you want long commodity exposure

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Brill as always. Listened to your recent podcast as well, lovely stuff 👏

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face made for tv and voice made for substack. podcast not my best work (rambled) but will tighten it up for the next one. thx

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This is very valuable content - great data-driven insights. One thing wonders me - what Mr. Blonde's position sizing rules are. One may have the best analysis but still, lose lots of money on inadequate trade sizes.

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tricky question to answer in a post and highly dependent on one’s risk tolerance in my opinion. of course we hope to be biggest in trades that work and smallest in losers

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ETSY

MSFT

L’O

EL

Geopolitics. Slowing growth. 2nd & 3rd order consequences from 1st level decisions taken. Unknown unknowns in addition to inflation relative to CB’s bad judgment over past 10-15 yrs.

What could be worse ? Hot war? Not too far away.

Add it all up & most independent thinking investors should have & must today position themselves for another 20% downside or worse.

Meaning if in the best of scenarios, one survives Mosul/Aleppo urban warfare in Kiev factored 2/3x.

Maybe.

Then, looking at the most high quality conservative growth names that will survive this 2022/23 onslaught are the new safe havens.

Ditto - CHF won’t do too badly either but nobody really cares.

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ETSY

MSFT

L’O

EL

NESN

LISN

Geopolitics. Slowing growth. 2nd & 3rd order consequences from 1st level decisions taken. Unknown unknowns in addition to inflation relative to CB’s bad judgment over past 10-15 yrs.

What could be worse ? Hot war? Not too far away.

Add it all up & most independent thinking investors should have & must today position themselves for another 20% downside or worse.

Meaning if in the best of scenarios, one survives Mosul/Aleppo urban warfare in Kiev factored 2/3x.

Maybe.

Then, looking at the most high quality conservative growth names that will survive this 2022/23 onslaught are the new safe havens.

Ditto - CHF won’t do too badly either but nobody really cares.

Expand full comment