Meet Chewbakker, the Dutch Genius
Friday, 30 October 2020
By James Woodburn
[3 min read]
Like all good acquaintances, it started at the pub…
This particular meeting happened back in December 2018, at my CrossFit gym’s Christmas party.
I got talking to Peter after a few beers.
‘So what do you do with yourself?’ I asked.
‘Oh…I look after the kids. My wife does the day job’, said Peter. ‘What line of work are you in?’
I always find this question hard to answer. Especially when on the face of it the person who’s asking might just be being polite or have no interest in the world of money. I mean, we are not your traditional finance guys and girls. We don’t manage money. We are certainly not in the mainstream financial press.
So, I explained as best I could. Peter seemed to know. After a couple more beers, it was clear to me there was more to this guy then he was letting on.
Turns out, by day he does indeed look after the kids.
But by night he became Chewbakker…
I know, that sounds weird.
Let me explain.
Dad by day, trader by night
‘Chewbakker’ is what Peter is known as on various global trading platforms. It’s a play on his Dutch surname Bakker.
The reason he started using it was to stay anonymous while he shared various trading signals and tests on platforms used by hedge funds and other traders.
Chewbakker (or Chewie), while the kids were asleep, would trade the options and future markets.
But make no mistake, Peter isn’t your typical private trader. His experience in the market spans many decades…building systems, testing, trading, failing, winning, being ripped off hundreds of thousands of dollars, getting it all back with a new system…
His story is pretty fascinating. And he’s an extremely smart guy, having built and sold two businesses and working for a time at Google on the technical side, amongst many other things.
Anyway, you’ll get a flavour of his story in the chat we had yesterday — see below (just forgive the attempted impression of the real Chewbacca!).
I’m delighted to formally welcome Peter into our fold of analysts and experts. I also expect to formally unveil the system we’ve been diligently working on in the background these past couple of years.
It’s an automated algorithmic formula that measures three distinct but hugely complex things every second of every day — industry, money, and risk — and spits it out into one single trading action.
Now, I’ve told you before I recently started testing this with a small portion of my own capital.
I wanted to experience it myself and see how it works in practice. I must say: It’s awesome. Yes, I’m up around 10% as of today in just a few months. At a time when the markets have gone nowhere. But perhaps more valuable than that is the peace of mind you get when you get a direct text message telling you what to do with one simple instruction.
Now, that instruction for the last 10 days has been to stay in cash.
I remember asking Peter about this when the signal changed to 100% cash. At the time, shares and bonds were doing well.
He replied, ‘Woody, no allocation is still an allocation. I don’t know why the system says cash. But perhaps we will find out.’
We did indeed find out. Two days later the share market and bond values tanked. Had I still been in those positions, I would not be up 10%, confidently ready to trade the next signal. I would be down, in the red. And maybe a bit nervous.
It’s incredibly powerful, in my opinion.
As Peter, or ‘Chewie’, made very clear early this week…
‘As I said before, this does not indicate that the algorithm is predicting a crash; the algorithm is just reacting to the increased volatility and the movement of copper and gold.
‘The price of risk is increasing again, too. It’s about 35% more expensive than normal for the market makers to hedge themselves against the risk in the markets. It increased from flat to +35% in four weeks. That is fast! And a major reading on itself.
‘Our stress gauge entered in the stress zone, so we can conclude that the position the algorithm took was accurate: all indexes went down quite a few percentage points in since we went to 100% cash.
‘By doing so you prevented a loss as the markets went down between 2% (Australian ETFs) and 10.3% (the US levered ETFs). Wow!’
Now, all this will start to make sense in the coming weeks.
But my point is, everything is easily explained after the fact. What’s much harder, is being able to position yourself for a market spike or a market fall ahead of time.
Well that’s what Chewie’s algorithm helps you do.
Anyway, time to meet the man himself.
Hope you enjoy our informal conversation and let me know if you have any questions for him.