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Explaining Korean Stocks and the AI Memory Trade - Rekt Mando
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Threadguy sits down with Rekt Mando, the macro trader who quit tradfi distressed credit to chase all-time-high breakouts and has been pitching the Korean stocks trade for weeks. Mando covers why he faded the war hard, what's changing in Korean governance, why the Chaebol discount is finally cracking, and how Samsung and SK Hynix are sitting on a structural memory bid. He gets into how all momentum traders are converging across crypto and microcap stocks, what AI bottlenecks are real vs hallucinated, why SaaS is the new altcoin trade, and the moment that flipped him from buying distressed bottoms to chasing all-time highs. Closes on the emerging markets he refuses to bid and the one Asian country he sees second to Korea.
Mando on a stream!
SPEAKER_01Yo, what's up, man?
SPEAKER_02Yo, you've been listening to me this whole time.
SPEAKER_01I know. I have, yeah. Yeah. It was a little bit of an intro. I hear you've been sick. Yeah, I'm fine. I just came back from a run, so I look dehydrated as fuck, but no, you look good, man. I'm good to go. How many miles?
SPEAKER_025k or what'd you do?
SPEAKER_01It's about 8k. Whoa. Wow.
SPEAKER_02That's awesome.
SPEAKER_01Staying healthy.
SPEAKER_02Good for you, dude.
SPEAKER_01I'm refusing to become an unk.
SPEAKER_02Yeah, well, some things you can't control, you know. But uh welcome back to the stream, dude. You've been active in the chat recently.
SPEAKER_01I enjoy it. I I normally finish kind of well, not finish work, but I'm normally working late and then I turn it on. And yeah, I really I really like the streams. I think you're doing a really good job with them. Um you said everyone's learning as as you get people on, and I think you caught the rotations well, like even in asset classes, so kind of going into certain different stocks, and then make maybe the rotation back to crypto now is is is well timed as well.
SPEAKER_02It's okay, it's first of all, thank you. Second of all, it's an interesting one. Um, I mean, I'll I'll say this like I I uh am attracted to your trading style. I think I've taken some tips from you, and on the war specifically, I feel like you faded the war very hard the whole time, which has been the obvious play here. But today things got a little bit scary.
SPEAKER_01Yeah, maybe. Depends what you're long, right? It really does depend what you're long. Like if you're long South Korean stocks, then yeah, like the war starts again. That's maybe not the best scenario to be in. But it feels as though everything else is kind of it feels like it's gonna be okay. Like it feels I think when I last came on the stream, I was like, you know, it bears were starting to sound way too smart, and you and you just know that that's when it's it's time to go long again. Um, to be honest, I didn't really get long crypto though. This whole move from 70k up to 80k wasn't really one where I was like being crypto. I owned hype.
SPEAKER_02Well it wasn't too exciting to be fair. The Bitcoin move wasn't super inspiring at any point.
SPEAKER_01Yeah, yeah, and hype kind of moved early and then just stuck stayed stayed around like 41 for a month. So like my crypto longs haven't actually been that good, but my kind of macro longs have been have been doing well, and I like I like what you said. Like buying Zcashes is what I would look for too. Like, it looks like it's broken out, nice little everyone's talking about it. I think it's a good I I don't own it, but it's the sort of thing that I would look at for sure.
SPEAKER_02Well, I you know, I hate the um the thesis of crypto, like I hated the metals to crypto to the gold to Bitcoin rotation thesis a couple months ago on everyone made so much money on gold, they're just gonna buy Bitcoin for absolutely no reason. That yeah, it was it was weak, it was obvious cope, but I feel now if you look at it and you look at how aggressively everything is pumped since the start of April, and then you start to see like high beta stuff go, right? Like you see like the serenity, photonics, low cap stuff getting fucking candled. And then I mean you see the South Korea index trade, like it's trading, and you I get the feeling of okay, people are looking to go further out, more reflexive, and just start slamming shit. And so crypto, there's like three things to buy, right? I mean, what else do you buy? Maybe Monero for Bitcoin, Zcash, Hyper Liquid. That's basically it with a combined market cap of of nothing.
SPEAKER_01That's probably, I mean, you probably see it on this show. You have to remember it's all the same people. The same people that are buying Serenity's coins were buying Ansom's Ans. Sorry, Serenity's stock were buying Ansem's coins two years ago, right? It's exactly the same people. There may be some like moral superiority around like stock trading to crypto trading, or maybe even vice versa, but it is just that same group of men who are looking for a 10x, and exactly the same sort of pump and dumb stuff will happen in these micro caps. You can already see it starting to happen a little bit with what happened like with that photonics stock last week, right? Dodgy practices and like people all in on this sort of stuff. Like, you can tell people are just here to to make as much money as possible, but I think you're seeing a merging of all these sorts of investors in the infrastructure too, with it hyper liquid, you have interactive brokers now allowing you to trade career stocks. So everyone like did you see the career option call call option volume? It just went also.
SPEAKER_02What was that uh the IPO yesterday? Circuit breaker instantly.
SPEAKER_01Yeah, so I mean, career stocks have a 30% circuit breaker on them, so it's kind of common but to hit circuit breakers. Um what about US? It depends on the index. It depends on the index. Um, often they'll have a volatility stop. Like if it's unclear what's caused it, there'll be a volatility stop. But um the the breakers are normally on the index level rather than a single stock level, at least for a longer period of time. But Korea's something that I've been interested in for a long time. Like it's one of the trades that I had on since kind of last year when I went there, last year. Which is sounds kind of dumb because you kind of go there and you go. I see if you're like on the back of a of a of a trip of a holiday, I decided to go long, um, long that. But that was a slightly different when I went there, it was just slightly different. I was just like, wow, this is gonna be kind of an interesting country to be long thematically.
SPEAKER_02But so you went to Korea and you bought the index after that.
SPEAKER_01Yeah, no, I'm not the Citrini analyst number three. There was there was the uh there was the NFT Korea uh trip.
SPEAKER_02Oh, oh, okay, okay, okay, okay.
SPEAKER_01And then Korea Blockchain Week. So it was like a trip where I went there, and then I went to the Singapore Grand Prix afterwards. But Korea was like a really impressive place to go to. Have you ever been?
SPEAKER_02No, I've been to Japan, I've been to Hong Kong, but never been to Korea.
SPEAKER_01Yeah, so Korea. I mean, obviously, people are Korean, so like I'm not gonna act like I know so much about Korea. I've only been there a couple of times, but I was just super impressed by it when I went. Korea was was basically destroyed, absolutely destroyed in the Korean War. Um, Seoul itself has been got like taken over three times. In fact, the airport where you land in is basically like the place of their like D-Day landings when the the US and the South Koreans took it back over. So Seoul was like destroyed, and you go there and it's amazing. Like every single building has been built within the last 70 years, and you're just incredibly impressed as a city that they built it like this, and and Korea was like destroyed during World War II. The other crazy thing I learned now when I was out there was so the the the atomic bombs that went off in Hiroshima and Nagasaki, 50,000 Koreans died. Because when those those bombs were dropped, Japan actually owned South Korea or had invaded South Korea, and it had taken essentially like slave labor back to the industrial hubs of South of Japan. So when they dropped, actually, Korea was one of the most affected countries because 50,000, I think it's up to 70,000 actually. Whoa. If you include like some which people don't really know about, but like Korea was destroyed in World War II and then was destroyed straight afterwards as well. Like this was not a country that that was in a great spot, it has barely any natural resources, so doesn't really have great agricultural resources or any energy resources, and you come to this place and they've just crushed it. Like highest IQ in the world of any country, some of the best education, um one of the best education systems in the whole world. And they can fucking gamble. They have obviously have a risk appetite. The way that they've built up the economy is slightly different in that Korean stocks have never really been that great a trade. They they have like this conglomerate system, it's called the Tribal system, where each each of the major corporations kind of own each other.
SPEAKER_02Okay.
SPEAKER_01Somebody was talking about, I think today someone pitched me SK Square as a trade because they own SK Heinex. And this is very common.
SPEAKER_02SK Square doesn't have 20% of SK Heinex, right?
SPEAKER_01Right. But this is very common in Korea. So like all the Chai Balls own each other via quite strange, um quite strange struct structures often, like indirect share ownership, and uh they've always traded a massive discount because they barely ever pay dividends or do stock buybacks, these countries, uh, the these companies, and often the money is hoarded to kind of help another Chibels uh company if it ever gets into distress. So like the P the in a P ratio, the E is kind of a meme in that you never really get the earnings back.
SPEAKER_02So like Wait, this should be a dumb question. I don't want to derail you, but like how many of these US companies are paying dividends?
SPEAKER_01Not that many. There are certain divid like there are certain tax benefits for dividends. So you have certain stocks which are like known as dividend stocks, but the vast majority of companies now do buybacks.
SPEAKER_02Okay, and they don't buy back in Korea.
SPEAKER_01No, this is the point. God like Korea, Korea traded like so. If China stocks traded, I don't know exactly, but let's say they trade in the low teens PE ratio, sometimes even lower. Korea's stocks traded even below that. So like they were these incredible companies often, but stock ownership was always not that great, in that you never really got buybacks, you never really got dividends, control minority shareholder interests were never really protected. It was always these chivals that had um that had control. And but it's like this other than that, it's like this incredible country in this in this rebuild. Um they have a really bad birth birth ratio, but um but it is just like wow, what they've done there over the last 70 years since since it happened. And I I started looking into it then, and um and I found all this stuff about why it was such a bad trade. But then they brought in all these reforms, and in fact, these so there's this whole AI trade going on right now, but the other big trade here is that South Korea, I believe last year, but definitely this year, have now that they brought in a set of laws which basically are trying to get rid of this career discount.
SPEAKER_02Um so like forcing buybacks or something?
SPEAKER_01Basically that forcing dividends, forcing buybacks. Also, there was a weird thing where like directors in South Korea they didn't actually report to shareholders, they reported to the company legally, so they didn't actually have to like make sure shareholders were they didn't have a fiduciary duty like they do in the US. Um, and they've changed that as well, and they've made it so that like the boards are a bit more there's a bit more the independent directors of the boards, I think, are a bit more um independent, they're not just shams, shams from these chaibles. So what's happened over the last year, and this was this is there was a there was an election, and the new party came in and basically said, we're gonna do all this. And this has happened at the same time as this incredible moment for South Korea where like they're in the epicenter of this memory trade, right? But they're both of them are happening at the same time. So and South Korea stocks still trade at below or around single digits PE ratio.
SPEAKER_02Four PE, right, is the index.
SPEAKER_01Some of the some of the some of the some of the top ones. So like the the main index is actually basically Samsung and SK Heinx now. It's like over 50%, is those two. And they, if you look at them on a forward PE ratio, they are ridiculous. They're like four to five times. I think probably five times the last the the moves over the last few days. But this is a broader trade, Korea, in that you've suddenly got this great AI trade where they basically own 90 to 95 percent of the of the market share of memory, and you have this this trade around governance changing, and um the index is basically tripled. Uh and they've tried they I think Korea uh Japan tried to do something like this uh as well, and and this is what was basically seen as um Arbonomics when um Shinzo Abe was the prime minister of Japan, and they saw a huge gain in the stock market during that period, so they tried to kind of catch up um in a similar sort of way. So and if you look at it versus US stocks, US stocks trade at like 25.
SPEAKER_02NVIDIA's like 2530, and it's like people are uh like laughing how low it is, right?
SPEAKER_01Yeah, I mean US stocks in my if you look at it on PE ratios, particularly forward PE ratios of the hyperscalers, they're not that stretched. Like uh Google's the one I really like, and it really depends, right? Because you have to believe in their their forward earnings, but it's kind of around 20 or less than 20. Uh, I think it's like 18 for Google. So this is not that not that stretch, but Korea, some of these PE ratios are ridiculous. They're ridiculous. Now, if you believe that these that these uh changes around governance are going to happen and they're gonna start doing buybacks and dividends, which is like the law is now forcing them to do that, at the same time as they have this incredible memory um market share, which feels like a structural bid rather than cyclical bid, it all kind of came together at the same time. Now I got involved because I liked the the governance angle, and I was like, I just you know I want to belong to the highest IQ country in the world if that that's happening like long high IQ. This feels like a good trade. Um but the like the main risk for this trade is is probably something like the straight of all moves happening, though. Like the other thing about like South Korea, which I said is they have barely any resources, so they have they basically import all of their food, all of their energy, tons of their um rare earths, or so they are very, very intertwined with the with the global um economy. And when Hormuz happened, like the if you look at the destroyed, it did get destroyed. Um and South Korea kind of plays the field slightly in that it is aligned with the US on like defense, and I think it now is is get getting a lot of its energy now or shifting some of its energy from the to to the US, but it it's still China is right there, China's right there, right? And then like 20%, I think, of of its exports still go to China, and you're there and you can kind of kind of tell they're playing both sides, like they don't really because they have to, right? Well, geographically they kind of have to with where they are, they're not like Taiwan, but they they they do have to kind of play both sides, but um and you know the US is is starting to force certain things on on the South Koreans with the CHIPS Act, so it's it's they are still a little bit beholden to their like major allies, but um, but it is still this incredible trade. But yeah, if Hormuz was to actually flare up again, there was a I think there was a happened a couple months ago where it suddenly turned out that like everyone needed helium, everyone needed helium, including South Korea, and like all of it came from Qatar, and suddenly there was just like, oh my god, there's gonna be this bottleneck. Um and South Korea's a little bit like that, it's very dependent on everyone else. So if if you were to see this massive flare-up in in Iran again, um, then I think that would be the main risk to that trade. Other than that, I think it's one of the best macro trades out there. You know, the uh I think it's one of these ones you can just own for a long, long time, and I I think it's gonna perform.
SPEAKER_02The the war thing was j it's crazy because it was I've never traded war before. It was just scary enough to think, man, maybe Trump is gonna destroy Karg Island, and maybe we are really gonna like maybe this whole thing really is gonna blow up and convinced everybody to get bearish at the lows, and then they just rip it back to ATH. And so, like the South Korea trade, which has been like the best trade, was the scariest long at the bottom because it was getting it's so reliant on energy, shared homoozes closed, they they you know, import all their oil, whatever. It was like the scariest thing to bid. It's crazy how that works.
SPEAKER_01Yeah, 100%. Like if you the intricacies of the whole AI trade basically happens in Taiwan and and South Korea. Like they've built whole industries around it, and this is why it's really difficult to replicate. This is why memory and and some of this chip stuff is really inelastic, because it is unbelievable amounts of country companies that are all together in a very small area all producing these chips or or or or memory, and um, but it's very dependent on one of these things uh on external resources, particularly South Korea. So when this happens, that was the trade to put to buy. I I didn't buy it during during that period. In fact, I only really bought it on the memory trade when I started to see the kind of the move in Micron happen, and then I was like, well, this this could still be the trade. I I don't know now. Like it feels as though they probably are they're they're hoping to to try and diversify their energy. The main thing is energy, so like I think they're they're starting up a couple a couple of nuclear plants again or trying to restart them. And I like I said, I think they're now trying to get more of their supply from from the US or or like the the other side of Saudi Arabia ports. But it is um so that's an interesting one. But I I don't the the the war stuff, it feels like everyone's just this is gonna be okay now.
SPEAKER_02Okay, so okay, I was gonna ask you a different question, but let's talk about war for a second. Is I uh I paid way too much attention, got kind of doomer about it, made some money on oil, and when you make some money being a bear, you like ruins your life, basically. It's like if you're a a really bad shooter makes one three-pointer and then they think they're fucking Steph Curry. That's what happened with me in oil. And I convinced myself to get bearish, and the play the whole time for the last two months has basically been fade every escalation and stay long. And Trump has basically shown an incredible ability to juggle uh escalating in Iran and keeping stocks up. And so until he loses that, which I thought he would have lost it, you know, 15 tacos ago, I don't know why you would just fade escalation, not just stay long. That's what I'm doing right now. And I'm like, I don't know, I've been watching oil go up. Yeah, it's scary, but like, you know if it gets scary enough if bonds pump enough, he's just gonna rip the same headline that's dumped it 15 times already, right?
SPEAKER_01Yeah, I think when I came on here, I kind of said I think the US has got the majority of the cards here still. Like, um the US has energy independence, it clearly just took over basically Venezuela's oil fields as well, and it looks like um you know it's gonna make place for other energy infrastructure. So it I feel as though the US can kind of still control this somewhat. They just need to dampen the rhetoric from the other side. There is a case here where you end up with like a really positive scenario at the end, right? Where Iran, the sanctions get dropped, and suddenly there is peace in that region, and you know, Trump is now the favorite to win the Nobel Priest Prize this year, which basically implies that that people think there's going to be some sort of a holistic peace deal by the end of this year. Um that would be interesting. So, like if you play it through, and then who knows what happens to to stocks in that sort of scenario, because it feels as though the other thing that's really become more of a popular view is that we're it was. I think you read a thematic piece, maybe it was a few shows ago, where that guy was like the Nasdaq's gonna triple over the next two or three years.
SPEAKER_02Chamba, chumba, qg q.
SPEAKER_01Right. And it is this this right, actually the benefits of AI here are just gonna go to companies, they're gonna cut workforce, margins are gonna go higher, and there's gonna be a select number of companies that just go parabolic in this move. And I think that is becoming a very, very attractive narrative suddenly. So as long as everything else calms down, that feels like something that people are gonna chase after. And we're also in this world where like everyone is moving to doing this, like chasing these sort of stocks, um, even in crypto. So you can just kind of feel like this is what everyone is looking for in terms of the trade. So I think you can chase these.
SPEAKER_02The Q's triple narrative is a fun one because it's like uh, or just the the thesis that he wrote is like uh in order to have the the biggest bubble of Whole time you have a bunch of the you know the fastest growing companies ever that are convinced that they're building God and their other ones are convinced if they don't build God first they lose, and so you have this just like infinite capex spend. The other thing I didn't you know I'm I'm so fried I've only ever really traded crypto, and so you under I didn't realize how incredible of a bubble the infinite top of passive flows into like the US stock market is and there's this guy was it Mike Green, Michael Green talks about this a lot. It's like every basically every American in the world puts like half of their earnings into the SP forever, every week forever, and never sells for like 40 years. And one dollar of cash does not equal one dollar in market cap, it equals a lot more, equals more like a hundred dollars in market cap. And so a lot of these stocks are like low float, high FTV as well on infinite scale, right?
SPEAKER_01Yeah, and I think Americans maybe don't understand how unique this is. So if you were to look at European stocks or UK stocks, they actually went sideways for about 20 years. If you bring up the Euro stocks, um let's have a look. Um 600, and you go all time on this thing. So this hit a high in 2000 and I think it was like 2000, even, and didn't actually break out of an all-time high until like 2021. It was and that was the same for the FTSE and tons of countries which are just not the US. Um there is just not the same sort of and like imagine you owned Japanese stocks or South Korean stocks, they did very similar sort of things. Like this is this is kind of crazy that the US has this incredible belief in the stock market, and um and and it attracts international capital too. So like, yeah, it's very tough to just not be long.
SPEAKER_02What uh as it relates to South Korea, what are you long and like how have you played it? And how like how much of your port?
SPEAKER_01Yeah, so I I was mainly long Samsung and the um the Cosby or the index, the ETF, basically. Um the EWYX index, basically. Um, which I just felt was because my trade wasn't just the memory trade when I first started. It was it was the it was actually the governance trade more than the memory trade. And then and then Samsung was the obvious trade here. That was always been a huge bit of the index. SK Hinex has only just become a huge bit of the index. But now if you're long the South Korean index, you're basically long those two stocks. Like you're in the memory trade. Which the memory trade is like an interesting one because it's kind of in terms of this kind of ramp up, it often does end in like a collapse, and people realize that supplies outstrip demand, but this time does feel slightly different. Um, supply is still relatively inelastic, like those three big ones so Micron, SK Hein, examSic, they are all building new fabs in the US and in South Korea now, but it feels like that's still gonna be like a 2028.
SPEAKER_02There also aren't all these fabs bunked out like for indefinitely, right? Like Intel is getting this create, everyone's booked out indefinitely on chip distribution, yeah.
SPEAKER_01So I think there's like two different types of orders. There's like soft orders and there's like hard orders. And I think this the hard orders really go to like 2028, and then there's people who are often I think they're kind of almost helping fund the fabs and like getting in the front of the queue for orders then, but they're slightly softer in in those orders. So I think when people say we have we're booked out to 2030, I I it I wouldn't necessarily think that this is like, oh, this is just the most obvious thing to long. And and traditionally, these sort of memory or these sort of chip trades has often been very boom bust. Like there's been lots of times over the last 20-30 years where that has happened and um suddenly supply just ramps up and everyone realizes they don't need the the demand's just not quite there. So it is something that people are wary of just being like, it's an infinite bid. It's like when you look at the um I see that's why you look at the the forward PE ratios of these companies and they're like, oh my god, this is insane. But you never really know what that's gonna be like in three years because suddenly they'll increase supply, and maybe the demand for data centers isn't there. This time does feel feel different, but they've said that before, and I think you can get like screwed. So this the memory trade is not just like an unbelievable, they're never gonna be able to get more memory. It they are, um, and you better hope the demand continues. I quite like the uranium trade, for example. I've been in that trade a lot. What do you mean when you that one's easiest just to be in the index, if I'm honest, or like the ETF URA, URA, global Uranium ETF? So my three macro trades have basically been South Korea, uranium, Google. Um, Google. And I was in gold, and then I cut it when it basically broke out, um, broke down.
SPEAKER_02Oh, the uranium thing looks looks pretty good.
SPEAKER_01Yeah, so uranium has has been this like widow maker of a trade, I think, for for the last 20 years.
SPEAKER_02What do you like perform on your port year over year? Like what yeah, like dude, uh Jack with the Market Wizards guys doing a new a new book is coming out. I I you're just in every good coin. Uh you you give me confidence that I can just print as a retail trader in every good coin because you're in every good coin. I feel like I'm in every good coin, you're in every good coin. You were talking about Google like six months ago on in October on the show. You're talking about Google.
SPEAKER_01Right, but Google was breaking out to new all-time highs at that time.
SPEAKER_02What do you return on your report every day?
SPEAKER_01I only look at things in all-time. I mean, I don't I don't track it like that, but it's been a good time for me in um in in trading over since I quit my trad fire job, it's been good.
SPEAKER_02And what did you do in TradFi?
SPEAKER_01I traded high yield uh credit and distressed credit. So companies that are basically about to default. So you get to learn about like balance sheets a lot.
SPEAKER_02And do you still do that at all?
SPEAKER_01No. In fact, I do the opposite, which is I only look at things breaking out to all-time highs in like some parabolic trade.
SPEAKER_02So did you get like radicalized trading garbage?
SPEAKER_01Basically, yeah. You basically trade garbage and you realize a lot of things get saved, and there is there is a lot, there is some huge money to be made. Like some of the best hedge funds in the world are distressed hedge funds, and they basically take over these companies, and then they restructure them, and then they make they make gazillions out of it. So you have like some of the smartest people in the whole world are these credit traders, and then you have before high frequency trading, before Jane Street, yeah, all the best hedge funds were these um were these credit funds.
SPEAKER_02So, like if someone plotting on Spirit Airlines right now, right?
SPEAKER_01That would be the exact thing. Spirit, I don't know if you'd buy spirit, but you you it's that sort of thing. Um you're looking for a company that looks like it's in the shitter, and then you try and do something smart with it, basically. But this this is not what I do. Like now I just look at stuff which is breaking out to all-time highs, and then suddenly you look like a genius because once something breaks out to all-time highs, like who knows where it's going? Like, who knows?
SPEAKER_02So, what do you like? Um how do you size these things? Like, you see Google approaching ATH, like are you buying spot? Are you trading perps? Like, what do you how are you entering?
SPEAKER_01Mainly perps. Mainly perps is what I've been trading.
SPEAKER_02Just keep buying higher, or what do you do?
SPEAKER_01I use grid bots recently for the last year and year and a half. I've used grid bots, and it's been very, very good. So you you trade the volatility. Often, when I tend to find that something is breaking out to all-time highs, the volatility also increases. So, like, you're dying for a day where let's say South Korea stocks go down 10%. Um, and you tend to find that when it like breaks out to all-time highs, that you get these like huge wicks and you're liquidating on every on both sides because everyone's like doing zero-day options and all this sort of shit. So I tend to find that not only do you get to own the best things, you get to like trade the volatility. So it's basically like futures LPs of these things as they break out to all-time highs. That's been my most successful strategy now for the last year.
SPEAKER_02So high leverage is tough when these things I was thinking about this the other day. Like, I've been doing mostly only trading perps the last six months. I've never really done like leverage math. Like, I sort of just like okay, it feels like 3x trade, feels like a 4x trade. Like, I don't, I just kind of like free dick it. Like, do you have like a uh a sheet that you follow based off how much you're sizing, what leverage to put it on? Like, how do you approach that?
SPEAKER_01Yeah, I think I came on the show and said it before. Like, over the last year, I've basically done a trade. I I do a trade journal every trade. Uh it's been the again a revolutionary because you the best thing about that is what you just said. You actually work out right, what what do you think is the upside here? What is your downside? Where would you cut it? And then you kind of know if it's worth it. Like I was looking, there was a trade I was looking at the other day, which was I was looking at ETHBTC. And ETHBTC is was breaking down, breaking down, it was like, right, I think Bitcoin's gonna perform ETH, it makes sense, say there's infinite bid, ETH, uh who knows. And I looked at it, and um, and then it just didn't seem like there was enough juice in it. It was like, oh, if I'm right on this, maybe it moves like 20, 30 percent. And I was just kind of like, well, that's not worth it. So it really also gives you a filter of right, what is actually gonna be like a 5x? Like, what is what is a trade where it's breaking out to a level it's never seen before, and it's got this thematic often move behind it where it's just like, right, this thing once once thread guy in the gang get behind it, like this thing's fucking going to the moon, like so that's what I look for. I look for that sort of stuff.
SPEAKER_02How do you um are you solo you have analysts or no?
SPEAKER_01No, no, no, analyst.
SPEAKER_02How are you like tracking cross themes, cross-market? There's just like I'm over I you know, since we started putting stock tickers on here every day, it's a little bit overwhelming. I'm like, there's so much to find entries on this stuff is difficult.
SPEAKER_01So, good question. And I don't want to plug stuff that I do that much. But I did today. I start I just I've been I I basically now use AI to do this, but I basically created a newsletter called Trades I'm Looking at Today, and it goes across all the people that I follow and then tracks all the trades that they're talking about, um, thematically across all asset classes. Um you'll see it on my Twitter if you go there. Uh, but I'm gonna start doing this. I don't know if I'll do it every day, but I'm definitely gonna do it every every couple of days, or definitely every week. And you know, then you don't miss a trade. You don't miss a trade on on particularly across like stocks, commodities, um, and now and crypto. I agree, like when I look at this, the things that I'm less drawn to right now are crypto because nothing's breaking out at all-time highs. Like, even Zcash isn't at all-time highs yet, it's getting close. So, so maybe uh maybe it's one to look at, but um, but a lot of the the stuff that's breaking out to all-time highs are obviously in the AI.
SPEAKER_02You know, I'm reading this book right now. It's called uh More Money Than God, and it's like uh you know what it is? Jack Mallage or something, and it's like a uh history of basically every hedge fund that dominated every every decade. And in the 70s, there's this fund called a commodities corp, and it started as this like hyper-specialized uh what one analyst per commodity, and it was like the first HFT, like math-only based, quick entries, quick exits, and it kept blowing up. And they brought this guy in, his name was Michael, I think Michael Magnus, and he invented this strategy called like he called it trend surfing, which is basically find a stock breaking out in all-time highs and fucking slam it. And these guys made so much money just slamming ATH brakes with a stop at ATH. Yeah, the whole strat. They made like billions of dollars in the 70s trend surfing, just h just slam ATH on everything, it doesn't even matter what it is. Honestly, the less you know, the better was was a quote.
SPEAKER_01Yeah, look, honestly, you know what actually corrupted me because I come, and this is a personal story, so people might not give a shit, but I come from this distressed world where you're literally buying bottoms, like you're sitting there going, like, right, I'm gonna buy this thing at 30 cents of a dollar, and I think it's gonna go back to par, which is a hundred. The max trades often here is at 100, so it's not like your your max is often like uh three to four X. And I remember I came into crypto and I remember this Suzu quote, which is the most amount of it was something along the lines of the most amount of money ever made has been about buying um things breaking out to all-time highs. And I remember OSF sending it to me and just being like, we have just been in the wrong fucking industry. Like often credit trading is like protecting your downside, and here it's just about making sure you get as much fucking upside while protecting that downside. So I still have a stop loss on these things breaking out to all-time highs, but just filter, like even something that looks like a bounce, like Zcash right now. I know it looks interesting, but it hasn't hit all-time highs.
SPEAKER_02It's still bouncy, it's still a bounce, uh.
SPEAKER_01Do you see what I mean? Like the resistance there will be its all-time highs, which is I don't forget, Zcash is like 700? 700s. Right. Which is a long way away, but it's less than a 2x now. And I look at some of this stuff and just go like, well, where's the fucking where's the offer? Like this stuff can just go up um a long, long way. Like South Korea stocks just did a fucking 3x. Like, and they could easily keep on going. And the Google's just hit an all-time high. I think Google's gonna be the most valuable company in the world. I think it's gonna, I think it's just gonna smash. If if there's one trade, which is the a company is going to completely dominate the AI trade and everyone's gonna lose their jobs, but company's gonna benefit, Google's that. It could just keep on going. Like the company is an absolute fucking behemoth. How do you sell all-time high breaks? So I generally that is the the trick. The hard part, right? Yeah. So I have like a very set rule where it has to break through like a four-hour trend and then a daily trend essentially. So off you're never really selling at all-time highs. You're never selling at all-time highs, you're selling on a a pretty steep reversal. So, like, you have to accept that you're never getting out of the top.
SPEAKER_02God, so you're you're you're giving back 20% to be like, okay, the trade's done, to not give up more further gains.
SPEAKER_01Exactly. You have to so gold, I didn't get out of 5,500, I got out of like 5,050 or something like that. So you kind of give up, and I got in at the start of the year when it was like 4,200, 300. So, like, I could have been like, Oh, I could have made more on that breakout to all-time highs. But generally, I tend to find these are quite low-risk trades.
SPEAKER_02It was like a smooth trade, right?
SPEAKER_01Up only, then you lose it and you're out. Like you, like they're kind of low risk. When you sit in these sort of trades, you kind of just go like, this is great. It's breaking out to all-time highs, everyone's talking about my fucking trade. I have a ton of people that I know just want to get into it, and for it to really me to get out, things have really got to shit, shit has got to hit the fan. Like, and then I just have like a quite protective loss. So the great thing about being in these trades is that you just wake up and go, like, oh, if it's a small drawdown, everyone's gonna fucking buy this thing, and it's just gonna keep it's just gonna keep going. Um when you first get into the trade, that's normally when it's the most dangerous, though, because like there's often quite a lot of volatility even as approaching all-time highs, so you've got to be like that's the most dangerous part of this strategy. It's like when you get into a trade just before it's about to hit all-time highs, or maybe minus five, ten percent, and it the volatility starts to pick up, and like it may hit your stop. Uh, so you've got to be a bit give it a bit more leeway right at the start. And the risky thing about that is sometimes it can be a double top, and then you know, you get decimated.
SPEAKER_02So you have like a confirmation, or you just fucking feel like it, I'm just going a little bit before ATH break, or what do you know?
SPEAKER_01Generally that, like, not I like to think of a thematic reason why I'm in it as well. Like, okay, this is this is gonna go at the same time.
SPEAKER_02So, did you trade Intel all-time high?
SPEAKER_01I didn't. I didn't trade it. That was a crazy trade. To be honest, my macro trade have been these three. Yeah, the Intel trade was is just kind of a wild one, right? Just like came from just a government only, and I like that trade. I like the it now, it feels like the cronyism is back in in certain bits of the US, and like people have been bullish on the rare earth trade for that reason in the US, and I've been looking at a few of those.
SPEAKER_02It hasn't done well though.
SPEAKER_01Rare Earth or leak?
SPEAKER_02Uh rare earth.
SPEAKER_01Yeah, USAR. Yeah, but I mean rare earths makes it sound like they're that rare, and I don't think they're I don't think they're that rare. If you look, if you look at if you look at the supply inelasticity of these things, uranium is at a completely different end of the spectrum to rare earths. Um and memory is somewhere in between. Let me put it that way. So, like rare earths, actually, there's quite a lot of rare earths. Uh, you just um and I think that supply will actually come online. So I actually think that's a bit more of a dangerous long-term trade to be in. It's more the trade that like the US just goes like, right, we're just gonna go all in on only sub this is your only supplier. Yeah, yeah.
SPEAKER_02How do you um how do you think about the buyback? You know, when you talk about the buybacks, and I saw there's this guy with Doug Colquid, I think is his name, wrote published this really cool like academic paper. I didn't read it, but I skimmed it about how the best performing stocks are the ones that buy back the most, and the worst performing are the ones that dilute the most. And you think about a thing like hyperliquid, market cap relative to Robinhood and how much they buy back, and do some math annualized on like what they would be buying back if they're making as much as Robinhood, and it's like it's disgusting. Like, how much attention are you paying to uh the amount of buybacks these stocks are are doing and should be doing, or are you just like you're trading charts more than that?
SPEAKER_01Yeah, so I would say that that doesn't surprise me at all, given we're in crypto and you you can't like think of all the un that's basically the unlocked trade versus the um same thing, right? Exactly versus the buyback trade. And we've seen what happens to everything that has unlocked versus buybacks. So I do think that um and it it could be really dangerous here. So like if you look at some of the SaaS stocks, basically for the last two decades, everyone has been paid in employee compensation um of all these stock options, and there was just this idea that all these tech stocks are gonna go up forever, and suddenly when the train reverses on some of these tech stocks, like these SaaS companies do not buy the dip in SaaS because now they have also all of this stock stock-based compensation coming in as well. I I just think these trades suddenly have just turned, and you're suddenly buying that alt, you'd like the Japanese soldier buying that that altcoin that just looks like death versus Bitcoin over the last like five years. So I would be very, very wary um on SAS for that reason. Uh it's interesting, like some of the big tech companies, um yeah, they didn't even do buybacks or they because they're spending so much on data centers right now or on chips, but that trade has somewhat slowed actually. So um well let's see. Let's see what happens. But I am that was a crazy take.
SPEAKER_02The IGV looks kind of good right now.
SPEAKER_01Yeah, I would um so I would just be really cool. You know what's crazy?
SPEAKER_02Like, I uh you know, like uh the GameStop thing was interesting to me when I first saw it on Thursday, the eBay proposal. I'm like, oh, this is a fucking fun trade. But then it's like you know, they have like eight billion dollars in cash or whatever, eBay's 55 billion, and they're just gonna print stock. It's insane. You could do that. I like forget you could do that. There's there's no limit to how much stock you can print.
SPEAKER_01No, however much the fucking market. What does that even mean? I mean, the the slight difference here is that you're not just there is a concept of value. Like if you're buying another company, I thought that was ridiculous when I first started learning about stocks, but you are meant to that's kind of we're probably from the crypto world where it's all vaporware. Like, you are meant to spend the stock to buy a company which gets you that higher earnings multiple. So that's why people allow your stuff to get diluted to buy, particularly to buy other companies or buy assets. So but yeah, the the dilute dilution can be kind of wild.
SPEAKER_02So, like if if you're getting stock based compensation as an employee at Adobe, they're just printing new stock to pay you, or they're pulling from the treasury, like tret you know, treasury, whatever.
SPEAKER_01Yeah, they're just printing new new stock to pay you.
SPEAKER_02And so as the stock goes down, your your comp doesn't go down, they're just printing more stock.
SPEAKER_01Well, for years. People just didn't really even count this. Um and then now it's suddenly just like this is huge overhang of of stock-based compensation. Wow and this is kind of um yeah, like I think I that's why just like SAS SAS to me, like it's just the opposite of the trade that I look for. It's buying a dip because it looks cheap and there are sellers. I'm just like, yeah, maybe maybe it bounces, but I'm not here to make 10 or 20 fucking percent. And I'm not here to be like the guy I got I caught the bottom. Catching the bottom is a trade so you should just be allergic to, in my opinion. Like that is that is for the distressed hedge funds or the super smart people who know how to value things. If you're just here to to 10x your money, I think you've got to be buying buying breakouts um and closing your eyes.
SPEAKER_02You also have to be way too smart to buy the Adobe Bottom. I'm not smart enough to buy that. You know, I don't have this like uh like I think you know like basic Z is one of the people that's really good at doing the being in the best coin. And he did that thing with Snap, and I think it like drove him nuts. He like wrote this whole thesis about Snapchat and why it's like the coin, you get the article and he publishes it, and then like Spiegel comes out and just like doubles supply, and he's like, Okay, yeah, this guy's retarded. It's like that was a that's the other thing.
SPEAKER_01I think I think some of the smartest people in the world by oh like think that there's this is this it's human nature, right? The the thing is you think it's a low-risk trade. Yeah, your mind tricks you into thinking it's a low-risk trade. It's like, oh, it's down so much, how much can I lose? And you'll you have to flip switch because then if you write down your trade journal, like what am I expecting to go up to and what am I expecting to go down? It's like this doesn't seem that attractive, and then often it can just keep on going fucking lower. Yeah, you get a figma, you get Figma, right? It just down like forever. Thread guy's not pulling up fucking Snapchat when it breaks down to a new low, you know. Like you need to be in the thing where everyone's looking at it so that that when it so you're it's a mind trick to buy bottoms. You need to buy things that are breaking out all new all-time highs. The filter then is incredibly high. There's not that many assets often breaking out to your all-time highs. There's off, or you can do it on an index level. Like I don't normally buy indexes, but I bought obviously the South Korea index, and yeah, that that's been one. Um, but I think you gotta you gotta trick yourself into just focusing on those things and ignoring everything else, even if it's just like this looks like a nice bounce. Bitcoin right now looks like a nice, nice bounce, and you're drawn to it because it's like, oh, you know, like I'm gonna be involved, but like whatever. Maybe it goes to 90. That's a 10% move here.
SPEAKER_02Like who gives a shit? Yeah, Google's up 10% intraday on earning Wednesday or whatever. That was a good take. Who gives a shit? Um, also, if you buy garbage, it's like okay, you try to buy the bottom of pump fun, it doesn't go up, and now you have pump fun tokens. It's like you fucking retard, you know? And you have to hold now you have to look at that shit in your wallet.
SPEAKER_01Okay, right. And you have to you have to write an essay on why everyone should buy Pump Fun.
SPEAKER_02It's like and everyone just like thinks you're a complete idiot.
SPEAKER_01You get like five views and then you just quietly sell it two weeks later. It's like okay.
SPEAKER_02Okay, one of the last things I want to ask you is um you you kind of touched on it with Europe and uh some of these Europe markets, but when is the last time uh like an emerging index like moved like this? Like I I know uh Trocken Miller published his 13 after and he was buying Brazili like Brazil really hard. Now it feels like right people are gonna I don't know if maybe Korea is a very unique one, obviously it is, but is this like fire into all these emerging markets? Is this like Korea is gonna go way higher? Like is this is it the thing that happens?
SPEAKER_01I've I've been in EM the massive trades like this before, and I've been to a lot of countries now, I've been to like 70 countries, and and there's a lot of countries where you go there and you see a lot of potential, and often it's it's basically a commodities trade. Or you think, you know, if I quit my job and I came out here and I built up a business, I reckon I could do it well. But investing in often emerging markets is a fucking shit show. You have the currency risk, you have political risk, the like the judiciary system in these places, like the corruption is often incredibly high, and they just they're just not got the enterprise skill often to or like why just describe to you about it it it takes a village, right, to build up the memory, the memory trade. Like you don't, it's not just you, it's not just like oh these guys are gonna make it work. You need everything to come together. And I've been in like I've been to India, Brazil, all of the basically all of the bricks now, um apart from Russia, to be fair. And each one of them, you kind of come away from it being like, yeah, but like things have really got to come together in various different forms for this to work out. South Korea is one of the only countries I've been to where I was like, you know what, this the only other country actually, which is a bit further down the spectrum where I felt like that could happen was Vietnam. But but definitely South Korea. I was like felt like it could be a country that really like emerges and becomes like a huge, huge um uh economy just because of the the way that the people were and and how industrious they were, and um it just felt like this was that that was like a more industrial trade than than the South Korean one, but South Korea I came away from just being like this is this could really be it as a great trade um or big country just to be like long. Um, but a lot of the other trades are really commodities trades.
SPEAKER_02Well, you know what the South Korean thing has to your point is it has the the it's not just a blind ATH break, it has the thematic like crazy bold, it has the thematic uh function as well.
SPEAKER_01Yeah, I think you can get lost in that slightly. Like one thing I would say about like is that everyone kind of thinks they're a macro analyst as well. And I I would say that it's I do think that these sort of like the like these macro, I'm gonna go long this country, can be like trades that you're in for a long, long, long time. Um, because like your thesis is can be very different to what the the rest of the world is um or thinks at that time. So I would say that I I don't normally do this. I don't normally go in because I've been in those trades before and they've just been you're just in them for like months, years, and nothing happens, and your your original thesis around them just doesn't really work out. South Korea really just felt like right time, right place to be long. Um, and I think it is one just to keep on long, but you're really just long SK Heinex or Samsung. Um so if you just want to get long one of the stocks, SK Heinex is kind of like the Mag 7. Sorry, Samsung is like the Mag 7. It's it's got a whole consumer electronics business. Memory is only about 50% of its business now, so you're kind of being long more of what I described to you before, where like the Chibols don't have as much control. SK Heinex is like you're in the memory trade, they only do memory, and um you you better believe that there's not gonna be oversupply.
SPEAKER_02I think that's a good take. I like that. Um this is sick. What else you got anything else for us before you go? Anything else that we need to know?
SPEAKER_01No, I mean those are my those are my I think I'm gonna uh stick to them. Like the I've been looking, so uranium. Um pull Zcash up on your computer. Google and yeah, Zcash looks interest. Like if I was to pick anything in crypto right now, and it's not like I have zero crypto exposure, I I I still have positions, but if I was to have anything, it would be it would probably be Zcash.
SPEAKER_02You're right though on this bounce thing. Like, I I you're really right on the bounce stuff. I I find myself in this spot. Every time I do it, I'm like, eh. What do you think about the trade? Like the ref like the the short three-day attention trade on of himps. That's something that I like love to trade. Like headline, headline comes out, but it isn't like an acquisition headline or it isn't earnings, but some sort of like general headline, and then everybody is just slamming high beta. And so I just slam it early and get out. But it I don't know if it's just fun and I like it, or it's just like if it's fun and I like it, or if it's just a bad idea as a trade.
SPEAKER_01Yeah, so I find I feel like this kind of feels like this the crypto trade as well. Like, if HIM's rallied, you get that gut feeling where you're like, fuck, it should have been long it, or like, but actually, the trade here, like it hit an all-time high right in December, and it was 50 or 60 or something like that. So now it's like a recovery trade, like they're trying to build back this distribution business, and and it may be an interesting one. It's I find it really difficult to play the peptide trade. It's it's one thing thematically I really want to get long. What are you buying? Right, and like they are like Eli Lilly. Like, I'm not buying this thing because because other businesses that it does are aren't gonna work out as well. So then you kind of get involved in I think there's no biking therapeutics. That's one that I was looking at for a little bit. That's one that I think you can, but HIMS HIMS is now in like the distribution bit of the business, which I don't know. Like, there's not that many pharmacies that are absolute bank. Like, you have to be Amazon to be good at that. Yeah, and I don't know if HIMS is gonna be that.
SPEAKER_02So I sort of meant it on like not taking a long term, but sort of like playing the bounce, but only on the three-day hype, similar to like City Sweeney does American Eagle and American Eagle like rips for like two weeks. The megachurch type of thing. Like, is that just like a retarded way to trade and I'm I'm lucky more than I'm right?
SPEAKER_01No, I actually think that's not a bad way to trade. Um, and like you're very good at it. I've noticed that you pick up you're you're not afraid to pick up on something when you realize that all the like you've seen it enough on your timeline and just own it because you think you're late, but actually you're you're actually gonna be early enough. Yeah, early enough.
SPEAKER_02You're gonna be early enough, mid first play kind of thing.
SPEAKER_01Early, yeah, yeah. But you're like you're not early enough, and and and that that's enough often to to just like catch the the next 20-30% of the move. Um, and I think you you're you will definitely do in the show, you'll pick up on that a lot. Um, hymns, I've been telling Rasmin, he needs to be the fucking I know he should be. This just fits him. Like, if you're gonna try to merge yourself into FinTwit, like just be the Hymns guy, right?
SPEAKER_00Like, just be like, I'm just being I don't care about I don't care about the fuck the stock. Like, I don't care about where it fucking is.
SPEAKER_01I'm all in. Uh I feel it really hits uh suits his brand. And I think actually hims is one of those ones where it could it has probably the best chance of being one of these viral style stocks just because of the whole when they get the clav deal, we have to we're long, right?
SPEAKER_02When they get the clav deal, we're obviously long.
SPEAKER_01But um other than that, I think yeah, uh I think that as a theme is definitely gonna be a big thing, but I just think that everyone is a neat now. Like everyone is now just gonna be trading stocks, like this is the way to make money, and I think we're gonna see unbelievable highs in various different asset classes. Don't get it. Everyone is trading stocks.
SPEAKER_02This is it's awesome. It's like the moves are so aggressive and focused that it really makes your ATH blast strategy work, even it's self-reinforcing, right? The moves are so concentrated and focused.
SPEAKER_01Yeah. But but honestly, once you've you you make it sound like you have to constantly hit all there's not that many things hitting all-time highs. Like go through your actual list of things that you're looking at and look at what is about and what is hitting all-time highs, and suddenly you'll realize it's actually just a few different things. Um, and often you're really trying to pick something that's just about to break out to all-time highs. That's the sweet spot. If you can find something that's just about to break out at all-time highs, or maybe it's a high of like 20 years, like uranium looks like it's those are the fucking the best, right?
SPEAKER_02That's a that's a really nice spot.
SPEAKER_01Like, if you look at if you bring up the URA index, you look at this and go like, right, this thing could hit an all now, it's breaking out something basically it did nothing for 20 years, and now it's gonna break out. And that's what I look for. Google was doing the same thing.
SPEAKER_02Silver trade, right?
SPEAKER_01Silver and gold, too. Silver's doing the same, gold was doing the chain. Like, these they're very easy to spot, and everyone often people are like, Oh, it's overvalued, or like who if it breaks out to all-time highs, everyone's gonna be looking at it, and the pain as it just hits new all-time highs every week, it's just gonna be like people just buy every dip, and you can normally get out at like a very, very nice multiple.
SPEAKER_02Good fucking session, Mando. You really came to play today, huh? I say the same thing every every time. Yeah, but it's good, man. We thought it was particularly good. You I feel like I mean this in a very respectful way. I think you give uh a lot of confidence to re like full retail traders, you know. Like you give me confidence. Like, damn, I could I could run up a real port here.
SPEAKER_01A hundred percent. You just described a the best hedge fund strategy for I I would reckon it's not just the 1970s, is to buy new all-time highs. It's not that like a fucking strategy, and it has insane returns if you have the right risk risk management around it. Like if you just know that you have a stop loss as it breaks out the all-time highs, the upside-downside of these trades are often just insane. And I actually think the the way that I do it with the with the volatility bots or the grid bots just means that you can.
SPEAKER_02What do you use? You have like is it yours? You don't use it?
SPEAKER_01Binance or I've used Pinex in the past because it does a lot of um stocks actually. Do you own one or not? Um I have done it before on chain, on hyperliquid, and um then I just found it was better liquidity on Binance, so I decided to use Binance.
SPEAKER_02Okay, say less. Um, manager of the coat, I'll see you on our annual show in like a month.
SPEAKER_01Yeah, I'll see you soon.
SPEAKER_02Why are you going to consensus?
SPEAKER_01I'm speaking. I'm speaking.
SPEAKER_02Let me let us know how it is. The crypto uh on the front. Go go preach the uh yeah, yeah, go preach uh SK Heinex in uh Korean stocks. Go preach Korean stocks at the crypto conference and let me know.
SPEAKER_01Yeah, I'll let you know how that goes. Okay, good luck.
SPEAKER_02All right, so yeah. Money every time. Cinema. I I don't know how you could listen to that and be like, we're guys, we're just gonna make a lot of money. I just think we're good at trading. I just think we're good at trading. Like, I don't know. Do you listen the all the daily guys in here? Like, I feel like you should listen to that and you get confidence in your ability to make money in this market, right? Like, am I am I tripping? Am I tripping, or it's just like every time it's just like, yeah. He's that guy's made a lot of that was his best appearance.