Fresh Prints: Now This Is a Story All About How My Portfolio Got Flipped-Turned Beige

Welcome back to Fresh Prints where I pull the trades that showed up way bigger than a ticker’s normal size, measured in standard deviations, and try to work out what the big money knows that the rest of us don’t. Today they mostly know where the vanilla aisle is.

I was ready for chaos. It’s the first trading day of November and the midterms are tomorrow. I wanted someone backing a truck into some weird small-cap. I got index funds.

The top two prints of the day were VTI -0.81%↓ at 155 sigma ($700M) and VEA -0.35%↓ at 131 sigma ($917M). That’s the whole US market and the whole developed world outside the US. Somebody walked into a 3-star Michelin restaurant and ordered wheat toast. “He’s going to write about toast now.” Yes, I am, because nearly a billion dollars of toast doesn’t happen by accident. The VEA print ranks #1 against its own history. That’s the biggest VEA trade the tape has ever seen for that ticker. Somebody paid a premium for “international, but make it boring.”

The arc: get boring, get short, get paid

Read the rest of the board top to bottom and the story writes itself:

• SCHO 0.03%↑ (short-term Treasuries): 78σ, $151M
• IAGG 0.02%↑ (international aggregate bonds): 61σ, $177M, rank #14
• SGOV 0.01%↑ (0–3 month T-bills): 38σ, $105M
• USFR 0.03%↑ (floating-rate Treasuries): 26σ, $36M
• MUB 0.05%↑ (munis): 14σ, $83M

That’s five bond funds, and almost all of them are short duration. This is the investing version of putting on sweatpants. Institutions are holding big core equity positions and parking whatever’s left somewhere with low duration risk that pays a coupon while they wait for Tuesday night. Add in model-portfolio staples like CGDV -0.67%↓ (rank #7), CGGR -0.99%↓ (rank #3), IUSG -1.60%↓, FNDX -0.37%↓ and AOM -0.30%↓, and it looks a lot like start-of-month allocation money. The robots got their November instructions, and the instructions said “beige.”

But somebody packed a hedge

Even people in sweatpants keep a fire extinguisher around. SOXS 12.49%↑ (3x inverse semis) printed at 27σ with about $18M. Right next to it, TQQQ -5.38%↓ (3x long Nasdaq) printed $38M at 17σ. Somebody is long the internet and short the chips at the same time? It’s like ordering a salad and a milkshake. You’re not wrong, you’re covered. “He always brings up food.” It’s a framework. Honestly, there are a couple of ways to read this combo, but I’d keep the SOXS print price marked on your chart for an all-clear-confluence check.

The ones you probably missed

ITB 3.67%↑ (homebuilders), 56σ, $38M. That’s a big print for a name nobody talks about at parties. Housing is extremely sensitive to rates, so seeing ITB in a tape full of short-duration bonds reads like a bet that rates ease. Either that or someone really, really likes drywall.

SLV -0.31%↓ + AGQ -0.65%↓ (silver, plus 2x leveraged silver): $115M in SLV at 24σ and a smaller AGQ print at 15σ. Someone wanted silver, and someone else wanted silver with a Red Bull.

REPL 9.61%↑ (Replimune), the only single stock in today’s top 20 odd prints. That’s $24.8M in an $18 stock, ranked #7 against its own history, in a clinical-stage oncology biotech. In a sea of index funds this one sticks out like a guy in a tuxedo at Costco. I don’t know what they know, and with biotech that’s the scary and exciting part. It goes on the watchlist.

The TL;DR

On the last trading day before the midterms, the biggest money in the room bought broad market equity, short-dated Treasuries and a hedge, which is the financial version of “I’ll just have what I usually have.” The interesting stuff is at the edges: homebuilders, silver and one lonely biotech that someone wrote a $25M check for.

If you missed the whole day, that’s the day. If you’re hunting for ideas, start with ITB and REPL.

See you soon. Stay fresh.

— VolumeLeaders

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This is not investment advice. I’m a guy reading a spreadsheet and making food jokes. This newsletter is for informational purposes only and is not investment advice. Nothing here is a recommendation to buy or sell any security. Past patterns in this data are not a guarantee of future results, a point this piece has hopefully made concrete rather than just disclaimed.