Navigating A Sea Trading Expedition Across Asia

7 February 2017

Navigating unchartered and often murky waters of trading, Thetis Macro Opportunities’ Portfolio Manager James Luong has a fund filled with Relative Value Fixed Income Commodities and Currencies (FICC) to offer.

By Swiss-Asia

If he had a choice, James Luong would not do anything else but start his own hedge fund. At Thétis Macro Opportunities, James and his team have deep understanding about the markets that they trade in. With a discernible and repeatable process in place, the fund is able to extract alpha when trading in fixed income commodities and currencies. What does James do to help him focus on the fund? Does he adopt a more risk-averse or risk-taking approach?

If you try to make money every week, you tend to have a good month. Odd how that works.

1. Swiss-Asia: How do you feel about the markets in the next six months?
Thetis: They are waiting to see whether Trump’s political gambit pays off, are his policies efficacious. US rates are in the middle of their value range, which is less attractive to take big risks. The oil market will trade on how cooperative the cartel behaves, whether geopolitics cause disruptions. US natural gas could have the tightest balance sheet in a decade. Gasoline is always full of surprises.

2. SA: Are you set for a spectacular performance in 2017?
T: Let’s take it a week at a time. If you try to make money every week, you tend to have a good month. Odd how that works.

3. SA: Complete the sentences. Considering the global macro spectrum in 2017…
T: I’m short on good macro calls at the moment and will go for the cop-out. Volatility is here to stay.

4. SA: US interest rates are…
T: Underpricing the risk of the Fed portfolio unwind.

5. SA: Asian markets…
T: Are on different tracks of growth, clouded by the spectre of US protectionist policies.

6. SA: Precious metals…
T: Are tricky. The can trade as a commodity, inflation-hedge, or crisis-hedge, depending on the environment. No strong views from these levels.

7. SA: Why did you launch your fund with Swiss-Asia?
T: Swiss-Asia takes care of the administrative aspects of running my fund, allowing me to concentrate on uncovering investment opportunities for my portfolio.

8. SA: Do you adopt a more risk-averse or risk-taking approach?
T: I tend to face market risk-appetite. We look for market dislocations and find good value when they are most risk-averse. Conversely, we tend to be a bit more cautious when the consensus is risk-on.

9. SA: What do you do that helps you focus on the fund?
T: I look at my book every day and ask myself two questions: Is there a better way of expressing my market view that perhaps, is more undervalued? Is my book positioned for the outcome that is an eventuality (be long eventually and short right-now, which will eventually pass)?

10. SA: With so much trading going on, how do you overcome and manage your emotions?
T: I assign probabilities to various outcomes. Meditation, exercise and seeing a good psychologist helps too.

11. SA: What does the fund mean to you?
T: It is a bit of a misnomer as we do increasingly far less macro trading than before. Thétis is the name of one of the early French expeditionary vessels to Indochina. We see ourselves navigating the unchartered and often murky waters of trading from Singapore. Thétis is also the Greek goddess of the sea. I studied Classics and have roots in Vietnam. It ticked a lot of boxes.