The Orange Variable

I mean, from somebody here running risk, it's... [chuckles] Well, normally my approach is this: Do I have something remotely close to an edge looking at this problem, you know? And again, edge is something we should talk about here because people tend to confuse edge with certainty of prediction.

Uh, and of course, you're never gonna have a certainty of prediction here, and not even a small, uh, band of, let's say, um, probabilistically being wrong or right here.

It's gonna be a wide band.

But sometimes, sometimes despite the band is wide in a problem in forecasting, the price action is so skewed in one direction that even with a wide band of a, with a wide dispersion and not so much precision in your forecast, you can still say, "I have positive expected value." I look at this, Brent, and I am sorry, but first of all, the forecast band dispersion is incredibly big, like f- another way to say I have no idea and nobody has.

And then on top of it, um, the market has learned not to overshoot about this, right? I mean, you have...

These guys yesterday were talking about closing Hormuz and reinstating a naval blockade.

I mean, those are, like, basically going back to prior, to pre-deal status, and oil went from $68 to 72.

I mean, like 73, whatever it is today.

So even then, you look at it and you're like, "Oh, yeah, but, you know, uh, now the market is afraid." Well, it's not really afraid.

You're not really to the point where the market goes ballistic because they're aware that terminally it's difficult to go back to closing Hormuz again.

So at the end of the day, a lot of words.

It's a word salad.

I sound like Wash these days, uh, to say I, I don't know, and probably many people don't know, and I would argue they don't have an edge and they should do nothing about this.

Well, and I think as a short-term trader, it requires a lot of discipline because even last night I was sitting here, and, like, the first thing you wanna do when you see those headlines is buy 10,000 USO or 100,000 USO or whatever your position size is, or 1,000 or whatever.

And y- like, I was literally, like, holding myself back from pressing the buttons last night because you think, "Okay, well, now they're re-escalating.

It's gotta ma- it's gotta matter." But it just doesn't matter.

That's the thing, is it just doesn't matter.

I mean, from somebody here running risk, it's... [chuckles] Well, normally my approach is this: Do I have something remotely close to an edge looking at this problem, you know? And again, edge is something we should talk about here because people tend to confuse edge with certainty of prediction.

Uh, and of course, you're never gonna have a certainty of prediction here, and not even a small, uh, band of, let's say, um, probabilistically being wrong or right here.

It's gonna be a wide band.

But sometimes, sometimes despite the band is wide in a problem in forecasting, the price action is so skewed in one direction that even with a wide band of a, with a wide dispersion and not so much precision in your forecast, you can still say, "I have positive expected value." I look at this, Brent, and I am sorry, but first of all, the forecast band dispersion is incredibly big, like f- another way to say I have no idea and nobody has.

And then on top of it, um, the market has learned not to overshoot about this, right? I mean, you have...

These guys yesterday were talking about closing Hormuz and reinstating a naval blockade.

I mean, those are, like, basically going back to prior, to pre-deal status, and oil went from $68 to 72.

I mean, like 73, whatever it is today.

So even then, you look at it and you're like, "Oh, yeah, but, you know, uh, now the market is afraid." Well, it's not really afraid.

You're not really to the point where the market goes ballistic because they're aware that terminally it's difficult to go back to closing Hormuz again.

So at the end of the day, a lot of words.

It's a word salad.

I sound like Wash these days, uh, to say I, I don't know, and probably many people don't know, and I would argue they don't have an edge and they should do nothing about this.

Well, and I think as a short-term trader, it requires a lot of discipline because even last night I was sitting here, and, like, the first thing you wanna do when you see those headlines is buy 10,000 USO or 100,000 USO or whatever your position size is, or 1,000 or whatever.

And y- like, I was literally, like, holding myself back from pressing the buttons last night because you think, "Okay, well, now they're re-escalating.

It's gotta ma- it's gotta matter." But it just doesn't matter.

That's the thing, is it just doesn't matter.