James Lavish Gives Us His "Strategy" for Trading These Markets

**Danny Moses** (0:02)
In this episode of On the Tape, I welcome James Lavish back to the pod. James came on as a guest last summer. We had a great conversation, not just about Bitcoin, but about the macro as well, as we share the same concerns about global fiat currency experiment and the potential for a sovereign debt spiral. A lot has happened since we last spoke, and we get into the changes of the Federal Reserve, what lies ahead for Bitcoin and the regulatory landscape for crypto, and the current challenges that Michael Saylor and his company's strategy is facing.
In addition to running two Bitcoin Opportunity Funds, James is a prolific writer on his sub stack, The Informationalist, which you can find at jameslavish.com. So please enjoy my conversation with James and stick around for my Kalshi picks of the week. James, welcome back to On the Tape. You were last on in early August last summer. A lot has happened since then across all parts of the markets and the economy.
For those that didn't listen to the episode or aren't familiar with you, maybe just a few minutes on your background and we'll dig in as you follow a lot more than just Bitcoin.

**James Lavish** (1:01)
Yeah, so it's good to be back here, Danny. Always good to talk to you. And so I come from the traditional world. So that surprises some people that are new into the space.
But I come from the hedge fund world up where you are. I worked and lived in New York City, started my career on the floor of the New York Stock Exchange, trading something called risk arbitrage or ADR arbitrage, and then got into arbitrage with different hedge funds. So, and then, I got into the Bitcoin space in 2021 And really just through my full experience and career behind it, understanding what it is, the growth of the space, the different companies in the space, and ultimately launched a Bitcoin focused hedge fund, the Bitcoin Opportunity Fund. And I write, really what happened is, I started writing about finance. And the issues that we talk about on Twitter all the time, which we happen to be with the Fed or the Treasury or debt or capital markets and how these things work, hedge funds, how they see this world, how they see the world of investing, and just trying to help people get up the curve on all these acronyms and different terms to understand the world of investing around them because it's quite opaque. I mean, we're not taught this stuff in schools.
We're not taught in high school, college, undergrad, even graduate school. MBAs don't understand a lot of this stuff because it's just not, it might be top of market or they might come at it from an economist viewpoint from a textbook. But the world works differently in capital markets, as you well know and are deeply experienced with. So and that's the reality. So just trying to help people understand this world of investing and to help them get to where they need to be.

**Danny Moses** (2:52)
Yeah, Wall Street loves acronyms and that's not an accident. So you write the informationalist, obviously, on Substack, it's jameslavish.com. And I was looking this week and we're gonna get into the macro. And then I was thinking as you were talking here that Michael Saylor could use your arbitrage expertise as he tries to navigate this debt equity situation he has. But you're now writing what I'm watching this week. And I think that's kind of a good place to start. We came off of the Fed meeting last week. You and I share kind of the same views of the global fiat currency experiment. And some people trade that by being long gold. Some do Bitcoin and some do both, which we're gonna get to.
So let's start with kind of, I know PCE is coming, but what you look for these days to kind of help signal and help in trading.

**James Lavish** (3:39)
Well, like, again, like you well know, is that the world revolves around credit markets. And so funny enough, being an equity investor, I'm very focused on the credit markets and top down, like where are we in the credit markets from the sovereign level? How are the sovereign, how's the sovereign debt trading? And anything from Fed funds and the overnight rate, the SOFA rate and where banks are lending to each other or hedge funds are borrowing from each other, all the way to the two year, the 10 year, the 30 year, like where are these things trading and how are they trading? What are they reflecting? Like what's the sentiment of investors out there? You've got this wild sentiment that's happening in the AI trade and it's all over the map. Anything from, you know, NVIDIA and Micron to SpaceX and there's some crazy valuations that are hitting the tape. And then the other side of it, you've got the 10 year reflecting worries about both the economy and about inflation. And so, and that is really being the benchmark treasury, arguably, of the world. Like so much of debt and credit is based off of the US 10 year treasury. Like watching that closely and the reactions to not just the Fed funds rate, but just the actual words that are coming out of the Federal Reserve officials' mouths. So now we've got a new Fed Chairman and Kevin Warsh, who's taking that tone down a bit. He's telling the world that they're going to talk about their policy and outlook less. They're going to give less guidance for the street. And one thing the street hates is surprises. So it's a question now of what impact is that going to have on the market. So those are the things I'm watching. I'm watching the credit markets. I'm listening to what the Fed is saying, who's saying it.