Hi YXI friends,

What a day to start October. Risk assets are up, shrugging off headlines about a Government shutdown or more tariffs. That’s why one should not focus on the headlines, but follow the price action instead.

One more thought about “News”. News has a natural tendency to report the doom and gloom because fear sells. Psychologically, investors are loss-averse and tend to worry about what small thing could cause a crash.

But consider this. By the time you read the news from Bloomberg, or even worse, listen to the talking heads who talk up their positions to exit with a profit, what edge do you have over the rest of the market? You are likely the last person to know.

The exception is if you are an expert at triangulating the implications of one set of news on other assets, but quickly enough before the sharp algos and investors start to price it in too. In that case, you need to be watching the news all day, forget your day job or the golf course, and let the market dictate your life. I used to be a market maker in rates and FX swaps, doing precisely that. Let me tell you, eight screens tied to your forehead are not as fun as they sound.

DISCLAIMER: This newsletter is intended for educational purposes only. Any information or analysis in this note does not constitute an offer to sell or a solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice, nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

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