DONT TRADE FADE (EP 5): Barron's Takes the Lead
Summary
TLDRIn this video, Jason Shapiro from Crowded Market Report revisits the 'Don't Trade Fade Series', examining various stock portfolios against the S&P 500. He notes that Dan Nathan's current trades are underperforming, with stocks like Nike and Walmart not working in his favor. The Baron's Round Table portfolio, comprised of top stock picks, has significantly underperformed the S&P 500, which is up nearly 12%. Other portfolios, including a random selection and one chosen by an AI (Chat GPT), also lag behind the S&P 500. Shapiro concludes that going against the consensus of these experts can be profitable, as evidenced by the long-short hedge fund Equity index outperforming by 10%. He encourages viewers to subscribe for more insights.
Takeaways
- 📈 The video discusses a series called 'Don't Trade Fade', which tracks the performance of various portfolios against the S&P 500.
- 👤 Jason Shapiro mentions Dan Nathan as a prominent trader known for his 'fade' strategies, but notes difficulties in tracking his trades due to lack of price details and delayed disclosures.
- 📉 Dan Nathan's current disclosed trades are mostly underperforming, with positions in Nike, XLE, XLK, USO, Tesla, and Walmart all showing losses over the last month.
- 🎯 The 'Baron's Round Table' portfolio, consisting of picks by top stock market experts, has underperformed the S&P 500, being up only 1.67% versus the S&P's nearly 12%.
- 🤔 The 'Consensus Spade' portfolio, derived from CNBC's end-of-year picks, has slightly outperformed the Baron's portfolio but still underperformed the S&P 500, returning 6%.
- 🔤 An alphabetically selected portfolio of the first 24 S&P 500 stocks has outperformed the expert picks but still underperformed the S&P 500, returning 2.79%.
- 🤖 The 'chat GDP chat GPT' portfolio, which randomly picked 24 stocks from the S&P 500, has performed better than the expert picks but still underperformed the S&P 500.
- 🚀 Nvidia was highlighted as a stock picked by chat GPT, which has done well, but even this best-performing portfolio did not outperform the S&P 500.
- 📊 The video concludes that going against the consensus of expert traders, or 'trading fade', has proven to be profitable, as demonstrated by the outperformance of the S&P 500 over the expert-selected portfolios.
- 📝 The speaker encourages viewers to check out 'crowdedmarketreport.com', sign up for their free Substack newsletter, and like the video if they found it enjoyable.
Q & A
What is the main theme of the video by Jason Shapiro?
-The main theme of the video is the 'Don't Trade Fade Series' where Jason Shapiro reviews the performance of various stock portfolios relative to the S&P 500.
Who is Dan Nathan and what is his role in the video?
-Dan Nathan is mentioned as one of the biggest Fades in the stock market, and Jason Shapiro discusses his trades and their current performance.
How has Nike performed in the last month according to Dan Nathan's disclosure?
-According to Dan Nathan's disclosure, Nike has gone down by 2.5% in the last month.
What is the performance of the 'Baron's Round Table' portfolio compared to the S&P 500?
-The 'Baron's Round Table' portfolio is up by 1.67% while the S&P 500 is up almost 12%, indicating that the portfolio has underperformed.
What is the 'Consensus Spade' and how has it performed?
-The 'Consensus Spade' is a portfolio created from CNBC's end of year picks. It has performed slightly better than the 'Baron's Round Table', being up by 6% compared to the S&P 500's 12%.
How did the random portfolio of the first 24 stocks from the S&P 500 perform?
-The random portfolio of the first 24 stocks from the S&P 500, taken alphabetically, has performed better than the expert picks but still underperformed the S&P 500, being up by 2.79%.
What is the performance of the 'Chat GPT' portfolio?
-The 'Chat GPT' portfolio, which selected 24 stocks from the S&P 500, has done quite well but still underperformed the S&P 500 by a small margin.
Why did Jason Shapiro choose Nvidia as an example from the 'Chat GPT' portfolio?
-Nvidia was chosen as an example because it was one of the stocks picked by 'Chat GPT', and it demonstrates that even the best portfolio in the comparison still underperformed the S&P 500.
What is the performance of Dan Nathan's trades mentioned in the video?
-Dan Nathan's trades, as mentioned in the video, are all losing, with none of them working in his favor.
What is the final message or conclusion of the video?
-The final message is that going opposite the consensus of these experts works, and it's a strategy that has been successful in various forms.
Outlines
📉 Stock Market Performance Review
In this segment, Jason Shapiro from crowdedmarketreport.com reviews the performance of various stock portfolios relative to the S&P 500. He begins by discussing Dan Nathan's trades, highlighting several positions that have not performed well in the last month, such as Nike, XLE, XLK, USO, and Tesla. Jason then moves on to analyze different portfolios, including The Baron's Round Table, which underperformed significantly with only a 1.67% gain compared to the S&P 500's 12%. He also covers the 'consensus Spade' portfolio, made up of CNBC's end-of-year picks, which has done slightly better with a 6% gain. Jason further discusses a random selection of the first 24 S&P 500 stocks alphabetically, which surprisingly outperformed the Baron experts' picks. Lastly, he mentions a portfolio created by an AI chatbot, which, despite being the best-performing of the non-expert portfolios, still underperformed the S&P 500. Jason concludes by emphasizing the point that following the consensus of experts can be a losing strategy.
📈 The Risks of Trading Against Expert Consensus
Jason Shapiro wraps up the video by reiterating the key takeaway: trading in the opposite direction of expert consensus can be profitable. He points out that the portfolio based on the best picks by the Barons, if shorted while being long on the S&P 500, would have resulted in a 10% gain for the year, which is essentially a market-neutral strategy. He encourages viewers to visit crowdedmarketreport.com for more insights, to sign up for their free Substack newsletter, and to like the video if they found it valuable. Jason ends by wishing everyone a good holiday weekend and promises to be back with more discussions soon.
Mindmap
Keywords
💡Don't trade fade Series
💡Dan Nathan
💡Options trades
💡Portfolios
💡S&P 500
💡Underperform
💡Consensus picks
💡Risk-free
💡Chat GPT
💡Market neutral
💡Long short hedge fund
Highlights
Introduction to the 'Don't Trade Fade' series by Jason Shapiro from Crowded Market Report.
Review of Dan Nathan's trades and their underperformance in comparison to the S&P 500.
Nike's stock performance being down 2.5% in the last month.
XLE and XLK's stock performance with July call spread and June put spread, respectively, both underperforming.
Uso's oil call spread performance, down 6.3% in the last month.
Tesla's stock increase and its put option not working as expected.
Walmart's stock surge post-earnings and the ineffective June put spread.
Introduction of The Baron's Round Table portfolio and its underperformance.
Comparison of The Baron's portfolio to the S&P 500's 12% increase.
The Consensus S&P trade's performance and its underperformance relative to the S&P 500.
Random alphabetical stock selection outperforming the expert picks.
Introduction of the Chat GPT portfolio and its relative performance to the S&P 500.
Nvidia's stock selection by Chat GPT and its impact on the portfolio's performance.
The Long Short Hedge Fund Equity Index's performance and its market neutrality.
The strategy of going opposite the consensus of experts and its effectiveness.
Invitation to check out Crowded Market Report and sign up for the free Substack.
Closing remarks and holiday weekend wishes.
Transcripts
[Music]
hello today's Sunday
May 26 2024 I'm Jason Shapiro with
crowded Market
report.com
um I thought this week I'd go back and
take a look at what we were doing
earlier in the year which we're calling
this don't trade fade Series where we
put together a bunch of portfolios to
track and see how they did relative the
S&P 500 um and I started with you know
Dan Nathan's trades where he gives his
disclosures because I think he's one of
the biggest Fades out there
um and got lost in a little bit because
he does a lot of options trades he
doesn't really give the price at which
they're done sometimes the trades are a
little delayed so got a little bit lost
in that wasn't able to track it uh
perfectly but I mean just as an example
you look at what he has on right now
according to his disclosure you know
long nike call
okay Nike in the last month is down 2
and a half% probably not working XLE
July call spread XLE is down 4 and a
half% in the last month probably not
working xlk June put spread xlk is up
7.7% in the last month probably not
working Uso which is also oil uh call
spread Uso down 6.3% in the last month
probably not working Tesla July I
put uh Tesla's up 6 and half% in the
last month probably not working Walmart
which he did right before the earnings
by the way June put spread Walmart's up
88.7% last month probably not working
okay so that's the general view of Dan
Nathan um to be a little bit more
specific on portfolios so we did a few
portfolios this one was The Baron's
Round Table okay we took all their picks
and we put an equal amount of dollars
into each one of their picks these are
the top of the top stock market picking
experts right and what they've done so
far this year as you can see um is this
portfolio is up
1.67% while the S&P is up you know
almost
12% and they have just underperformed
the whole way through right these are
the top experts according to bar right
that's that trade uh this I called the
consensus Spade which is what I took
from the CNBC end of year picks for the
year and I took the ones that I thought
were the most consensus by the people um
and this is how they have done they are
doing a little better they're up 6%
versus the S&P uh up about 12 so they've
gotten about half the S&P return um
completely underperformed on the way up
and the way down but um so they've
gotten half the S&P return so if you
were long S&P and short this on a dollar
equal basis uh you've made 6%
essentially
risk-free um
this is alphabetical so we just took the
first 24 stocks alphabetically to be as
random as we could that's clearly
underperformed as well um it's up 2.79%
which by the way is better than the
baron experts okay so just taking the
first 24 stocks on the S&P 500
alphabetically has beaten the experts in
barrass
um but still you know way underperformed
the S&P and then this was chat GDP chat
GPT okay we just said pick 24 stocks
from the S&P 500 and this one's done
quite well right uh under perform the
S&P by a little bit but has done better
than all the other portfolios just going
and and of course that's CU one of the
stocks they picked was Nvidia Nvidia and
we didn't give it any kind of thing we
just said pick 24 stocks watch chat GPT
would come up with Nvidia who knows but
even within its being the best portfolio
here um still underperform the S&P so I
think the point is made here Dan
Nathan's losing on every one of his
trades okay and that doesn't me include
declares he's closing he's probably
closed out a few winners but um he he's
closed out so many losers shorting SM SM
Mage buying puts on SM Mage all the time
you know
um but every one of these pfolio
underperformed and the interesting one
of course being the baron one
um has just gotten destroyed I mean
you're talking about it's it's 10% if
you bought the S&P 500 and shorted all
the picks by these Baron experts you're
up 10% essentially risk-free or at least
Market neutral right a market that's
beating okay the long
short um hedge fund Equity index which
isn't equally long short they're usually
you know leaning to the long side as
they should but they have shorts against
it this is
100% long $100 of S&P short $100
distributed equally among these 24
stocks that were the the best picks by
Barons and you're up 10% on the
year so this is the point don't trade
fade go opposite the consensus of these
experts it works okay in many different
forms all right that's about it thought
I pointed out hope you enjoyed check us
out on crowded marketreport
tocom um sign up for our free substack
and uh and please like the video if if
you enjoyed it thank you I hope
everybody has a good uh holiday weekend
and we'll talk again
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