I was discussing principal component analysis and eigenvalues with a friend today. If you’re not familiar with stat arb in the pairs-based trading world this paper is a good read.
Statistical Arbitrage in Pairs Based Trading
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Author Archives: JeremyWhittaker
Why I’m shorting ULTHF
I woke up to this text message yesterday.
It was completely unsolicited and I have no idea what the source of it is. Could it be a potential pump and dump given the current market circumstances? Maybe… so I decided to dig a little into this company. It looks like it spiked a few years back and has been basically worthless for the last 3 years.
What’s interesting is it looks like it is being pumped again recently. Here is the last 2 years.
Zooming in closer it looks like there has been a massive amount of volume increase in the last 3 days. Hence my text message perhaps?
What about Google Trends did people recently just start searching for ULTH or ULTHF?
I wonder what reddit has to say.
Financials
Finally, I wonder what their financials look like? Would I be comfortable holding this short position?
Let’s keep in mind this company has a market cap of $42m
But..
Only $80k in cash.
$7,500 in accounts receivable
$92k in assets
$323k in liabilities
-$5,032,200 in retaind earnings
But Lithium is rare and the price is about to explode!
So let’s take a look at LIT which is an ETF that holds a bunch of Lithium related stocks. https://www.globalxetfs.com/funds/lit/
As you can see from their holdings ULTHF is not listed. This adds further evidence this stock should be shorted. In fact, if you wanted to take a more market neutral approach to this trade you could go long an equal-weighted amount of LIT.
Time to get short
Seems like more pump and dump hype. I’m definitely going short.
I tried to get short on 2/24 @ 1.40 but my broker didn’t have any shares available.
So I got an email this morning…
I was able to open a position this morning short @ 1.15. It has fallen already so I’m opening another short position @ 1.01. This trade would already be up 40% if it wasn’t rejected yesterday.
The world’s largest short squeeze tomorrow? My 2020 trade already up 193% should benefit heavily.
Last year I was looking to up my precious metal holdings. I like to keep 10% of my net worth in gold and 1% in silver. I bumped my gold holdings to 20% given the Coronavirus outbreak amongst other reasons outlined below. However, when I went to go and purchase silver from APMEX. I noticed the cheapest bullion I could get was something like 10-20% over spot price So I switched to long-dated options instead. I landed on a few. But eventually piled in on one a strike price of 30 with an expiration of January 21st, 2022. I bought these for $1.15 at the time. Looks like I actually picked the worst out of the four that I bought. No worries though I’m not complaining at a 192.68% increase.
The reason for my trade were as follows:
Physical silver was trading way over spot price at APMEX
The gold to silver ratio was the highest it has ever been in the last 100-years.
When governments get in trouble they just inflate your money away. It has been this way since the beginning of time.
The federal reserve rate was basically dropped to 0% indicating massive problems.
Silver is the “poor man’s gold” as Covid struck harder I assumed it would rally on the Fed’s printing press which was sure to accelerate and the Fed’s balance sheet had spike massively.
The fed now owns 1/3 of all mortgage-backed securities. They are literally bailing out every asset class at risk of jeopardizing the future of the sovereign credit.
Update:
It has been rumored that online bullion sites have ran out of silver until the markets open tomorrow and Wall Street Bets may have their sites set on SLV as their next target. I’m not so sure they can pump silver up 1,600% like they did with GME but it will be interesting to see what can be done. Supply of silver is already very low after the markets closed Friday. Here is a quote from WSB, “Corner the market. GV thinks its possible to squeeze $SLV, FUCK AFTER SEEING $AG AND $GME EVEN I THINK WE CAN DO IT. BUY $SLV GO ALL IN TH GAINZ WILL BE UNLIMITED. DEMAND PHYSICAL IF YOU CAN. FUCK THE BANKS.”
I just put in a big order for SLV options 30.5 strike expiring 2/5/21. My issue is the market is closed. I put in the order at .23 limit and I’m not sure if it will get filled. Regardless I’m still holding a bunch of futures from my previous trade. Future markets are already showing a large breakout.
Here is a message from the CEO of APMEX:
APMEX Statement On Current Market Conditions:
In the last week, we have seen a dramatic shift in Silver demand from our customers. For example, the ratio of ounces sold per day was running about two times earlier in the week and closer to four times the average demand by the end of the week. Once markets closed on Friday, we saw demand hit as much as six times a typical business day and more than 12 times a normal weekend day. Combined with the extremely high demand levels, we are also seeing a surge in new customers. On Saturday alone, we added as many new customers as we usually add in a week.
Any Precious Metal dealer will take a long position in the futures market to protect against spot price exposure when the markets open. We do this because it is our goal not to take a speculative position on metal. The weekends are unique as we are not able to real-time hedge our position. We took an aggressive position this weekend, but clearly could not have predicted the volumes that were seen. We have partnerships around to world that allowed us to cover these long positions, but only to a point. Once we exceeded our comfort levels, we had little choice but to stop the sale of Silver on our website. This was a difficult decision to make and unprecedented in our history.
As we evaluate the markets, it is difficult to know where Silver’s price and demand will go in the coming day and weeks. APMEX is highly capitalized and has more than $150 million in inventory to support demand. We have made strategic decisions to procure additional metal, locking up any metal we can find in the market place. We suspect premiums will rise and rise quickly, as we are seeing significant increases in our costs, when we can even locate the metal. It is also highly likely that we will need an additional day or two to fill orders based on current order counts. The one guarantee we can make to our customers is that you will only be sold metal that is on-site, or we have procured the metal with a firm commitment date from our partners. In markets like this, we feel this is the best approach a retailer can take, as no one can predict product availability.
We want to thank our customers for their patience and understanding during these turbulent times. APMEX prides itself on best in class service and delivering on promises to our customers.
Regards,
Ken Lewis
CEO, APMEX
I’ll let TheHappyHawaiian explain:
Here is his updated post:
Want $300 for free?
I remember back in 2000 during the dot com bubble all of these companies would pay you just to surf the internet using their browser or plugin. We may be in another bubble of some sort but that’s not my purpose of this article.
Recently I received a pop up on Facebook for SoFi. A free $350 just for funding a loan. Interesting, so for kicks I applied. My application is still pending but I can’t imagine I won’t get funded. They had a minimum loan amount of $10,001.
They indicate that they will give you the $300 within 30 days of funding your loan. The interest rate is 9.25% which is about $77/month in interest. So you’ll want to pay the loan off with the money you receive as soon as the bonus funds are received. Technically you’re probably only going to net $223. But hey that’s almost 40% of what the government is giving out for stimulus.
What’s interesting is this company is also giving away a free $50 in stocks just for opening an investment account. Another free $25 in Bitcoin just for opening a crypto currency account and buying at least $10 worth of crypto.
Seems like they’re pretty desperate to boost their sales for their upcoming IPO and inflate their valuation. You might as well take advantage of it.
Cannabis Grow journal
Water
You always want to make sure your water is at a pH of 5.8. I calibrated my pH meter and then measured my tap and RO water. You can always then measure these two as a baseline to make sure your meter doesn’t need to be recalibrated.
Tap water pH: 6.1 / RO water pH: 6.6
1.16.21-Tap water pH: 7.3 / RO water pH: 8.2
Here is a list of things you will need to calibrate your water.
2021.1.3 2100
First step is to simply drop your seeds into RO water. I would recommend a max of 5 per cup for 15 hours.
2 green crack seeds in RO water. 4 Jack Herer in RO water.
2021.1.4 1300
Seeds have been soaking for 16 hours moving to napkin in Ziplock, black bag, and box. Placed on Ether Miner for heat.
2021.1.5
Checked the seeds no growth yet.
2021.1.6
Two green crack seeds have sprouted so I’m going to move these to root riot plugs.
The four Jack Herer seeds have not yet sprouted so I’m going to stick them back in a ziplock covered in a paper towel, black bag, and box.
2021.1.7
Jack Herer seeds still don’t seem to be germinating that quick. I’m going to leave them another day.
Also no sprouting in the humidity dome from the Green Crack plants.
One of the Green Crack plants popped through in the pm.
2021.1.8
So I probably let this Green Crack plant go for too long in the dark. I’m going to move it into the grow tent where it can get a ton of blue spectrum light. This will promote bushy growth vs. the red spectrum which will cause growth in length and is better for flowering.
I’m going to move all the Jack Herer seeds to the humidity dome with the exception of one which doesn’t appear to have popped open. One of them appears to have broke when I moved it. I feel like I may have left my paper towel too wet.
Here is the placement of the seeds in the humidity dome.
Humidity
You’re going to want a humid environment for your plants. I would recommend something like this.
2021.1.9
Lights
Any of these smaller lights will work for the seedling phase.
Powerful LED’s
You are eventually going to need something more powerful. This is what I use.
2021.1.10
Looks like all of the seedlings popped except one. Haven’t added any water since the original move from the plastic bag. Also the last Jack Herer seed is refusing to germinate. I left it in the bag but typically when it takes this long they’re duds.
2021.1.11
2021.1.12
Pretty sure that bottom left Jack Herer is shot. Plus the last seed doesn’t appear to be germinating.
2021.1.14
Looks like roots are starting to appear. I’ll probably move these to a hydroponic setup soon.
First nutrients
Now that these seedlings are getting a little older I’m going to add some Clonex nutrients. I’m going to mix up 1 gallon of water and 18mL of Clonex.
1.21.2021
So I definitely got lazy and waited too long to move these into my hydroponic box in my window seal. You can see some of the leaves are in bad shape.
I’m going to put these in my south facing window seal for light. I’m going to supplement it with a florescent light 18 hours on and 6 hours off.
Water and Nutrients
Here is my template for maintaing the hydroponic system. This one is just a single 5 gallon bucket that pumps the water onto the roots and it drains back down.
The main nutrients I use are made by General Hydroponics.
I also use a few additives in addition to these.
h2o2 also known as hydrogen peroxide. In hydroponic setups you’re apt to get some type of root rot or infection. I use h2o2 as a preventative along with Armor Si made by General Hydroponics.
You’ll want to use RO water with your setup. This way your water is pure. With that being said it’s important to add calcium and magnesium back into the water.
Flushing your water
Every 7-14 days you’ll want to completely drain and flush your water. What I’ll typically do is drain all the water. Replace it with tap water and this FloraKleen product. Let this run for 2-4 hours and then completely drain it.
1.27.2021
I haven’t done anything to the plants. I just let them grow with 18 hours of LED light and then the natural sunlight through the window.
1.29.2021
I wanted to post an update of what the roots look like at this point.
I also lost one of the plants and only had 4 growing. So I decided to germinate two more today. A Harlequin and a Blueberry plant. I tried twice to get a Harlequin to germinate and failed both times. So I’m just going to move this Blueberry over to the window seal hydroponic setup.
2.1.2021
The Blueberry is looking healthy after a few days.
2.11.2021
So I neglected these plants again. I haven’t added any nutrients since the initial move on 1.23.2021. It gives you an idea of how maintenance-free this setup is. You can also see a large amount of growth in a relatively short timeframe. The roots grew way too big to pull through the plastic containers so I lost a good portion of them while transplanting tonight. It will be interesting to see how they respond. You can see how they’re in their final spot which is the 5-gallon bucket until they flower and harvest. I had to leave two of them in the window seal due to a lack of room in the tent. Their roots are going to get way too big for this setup. I may let them flower early or move them to a dirt container.
Notice the Blueberry is the smallest one and is about 10 days old.
Tent
The plants are now in this tent.
Lighting
The LED light I’m using is this.
Exhaust Fan
You’ll also want a fan to keep the airflow and vent the plants. I use this one.
Timer
I use these timers to control the lights.
Humidity
You’ll also need a humidifier to keep your air humid.
The method I use are 5-gallon buckets in which one bucket is the control bucket. It’s empty and they all drain back into it. Then the water gets re-circulated using a pump to spray the roots.
2.25.2021
Here are the plants in their final home. In Arizona, you can grow up to 12 plants per household so long as there are two adults in the household.
3.5.2021
Updated status.
3.12.2021
Updated status.
3.17.2021
Lighting Schedule change
Today I’m switching the lights to be on 12 hours and off 12 hours. What this does is it signals to the plant it’s time to flower, or create buds. This will be the final phase of my grow in about 6-8 weeks the bud will be ready to harvest.
3.22.2021
I wanted to show what a male plant looks like. I had to take this one out of the grow tent. You don’t want males as they will pollinate the females and ruin the crop.
You can see how big this plant has gotten and it has developed quite a rooting system!
4.1.2021
4.13.21
Buds are starting to come to life. Just a few more weeks left of flowering.
