Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

UK AI Safety Summit

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Last week the UK and Prime Minister Rishi Sunak hosted the 2023 AI Safety Summit at Bletchley Park, Buckinghamshire.  The summit brought together leaders from 27 countries around the world, including the United States, China, the EU, India, Israel, and the Middle East.  The introduction to the summit can be viewed here. The goal of the summit was stated as:

“The summit will bring together international governments, leading AI companies, civil society groups and experts in research to consider the risks of AI, especially at the frontier of development, and discuss how they can be mitigated through internationally coordinated action. Frontier AI models hold enormous potential to power economic growth, drive scientific progress and wider public benefits, while also posing potential safety risks if not developed responsibly.”
AI Safety Summit 2023

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Plunder Indeed

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I just finished reading the new book Plunder during my eight hour plane flight. If you’re in the mood for a book to make you feel really angry and helpless, but have I got a beauty for you. This book, written by a Columbia (undergrad) and Stanford (law school) graduate who works at the Justice Department, lays out in tremendous detail how the utterly amoral private equity world exploits………

  • Retail: laying waste to stores, ruining the lives of underpaid workers, and driving giant chains to bankruptcy;
  • Housing: gobbling up houses on the cheap and renting them back to the working class under oppressive terms;
  • Nursing Homes: cutting staff and supplies to a minimum, leading to the deaths of tens of thousands of old people before their time;
  • Health Care: likewise skimping on supplies, staff, and upkeep, leading to a degradation in care;
  • Finance: taking over the spaces formerly occupied by the likes of Lehman and Goldman;
  • Prisons: taking advantage of a literally captive audience, selling them overpriced phone calls, rotting, maggot-infested food, and overpriced junk from the commissary

I used to naively think that private equity was an industry built on optimizing businesses for eliminating inefficiencies, but “plunder” is a perfect word for it. If every single private equity organization on the planet was liquidated, the world would be a vastly, vastly better place. In the meanwhile, the most sinister among us are absolutely thriving.

November Game Plan

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November is here.  A wild 2023 continues to fly by unrestrained.  In my last post, Autumn Fall, I was looking for weakness to take hold in the markets from the beginning of August through the end of November. The weakness that we have seen over the past three months in markets is what I was anticipating, with roughly 20% declines in IWM and IYR.  As we enter into the beginning of November I ask the question:  Is the selling over for this year, or will there be more bearish opportunities in November?

To attempt to answer that question we’ll be looking at the crude oil analog, as well as the November setups for IWM, SPY, IYR, and XLF.  The crude oil analog below is the chart that I showed in Autumn Fall.  The red box in the top left is the time period of August – November 2013, which should be echoing through the broader market August – November 2023.  The analog is not anticipating the weakness in the broader market to stop until the end of November, followed by a December bounce.

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Color Me Dumbstruck (by Xerxes)

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I hope this post isn’t too depressing. I am using it almost like my trading journal as I think you may get something out of my lessons the market is teaching me this week (even if all you get is some schadenfreude). As I’ve said in the past many times, I don’t know for certain what will happen in the markets. In fact, I am often wrong. So instead of being monodirectional, I lay out potential paths which I may see probable and play accordingly. (Side note: In this way, my approach to markets actually is my approach to poker. I was going to write up a post about poker itself and its translational lessons to trading, but didn’t think anyone would be interested enough or know enough about poker to get much out of it.)

The intent is so I make good money when I am right and don’t lose my shirt when I am wrong. Well, this past week was one where I was very, very wrong. It happens often enough, but it hurts when the words that come out of my mouth (or in this case that I type in my notes) are not followed by my actions. I reviewed my notes from this past week and it was almost funny in a very cynical kind of way.

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