Investors Are Ignorant, Fade Their Conviction: Jason Shapiro

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Jason Shapiro joins the podcast to discuss his trading strategy, based on the simple premise that most investors are wrong most of the time. This approach requires trades to be crowded, which is decidedly (and surprisingly) not the case right now -- with two possible exceptions.

Content Highlights

• Most traders lose money. Shapiro seeks to capture these losses by going against the crowd (3:11);
• He does this by monitoring the Commitment of Traders report for extreme positioning, which he then fades (4:03);
• The thinking behind this? The crowd is wrong. "It's really that simple." The discounting method is not price but positioning (6:11);
• Shapiro monitors 37 different futures markets. Two examples of where this approach worked in the past (7:03);
• Right now "I'm seeing some pretty scary stuff, because you don't have anybody crowded" in major asset classes (8:24);
• One possible exception: lumber (11:08);
• Background on the guest (16:35);
• Patience is a virtue, especially for contrarians (27:28);
• "I have contrarian views on everything...that's how I develop my opinion." People are wrong because they want others to guide them (31:00);
• The set-up in cryptos is "massively dangerous" based on positioning in Bitcoin futures. This sets Bitcoin and cryptos up for a major drop... (36:36).

(On this last point, Shapiro shared the following chart)

For More About Jason Shapiro

• Website: CrowdedMarketReport.com;
• Twitter: @Crowded_Mkt_Rpt;
• LinkedIn: CMR-Publishing.