“To succeed, you must fail.”
Key takeaways
- Long Bitcoin (via our IBIT Asset Allocation) was up another +4.6% for us yesterday
- Did you know that, as of last night’s close, 1209 of the Russell 2000’s companies had reported an aggregate Earnings Depression of -28.7% year-over-year?
- We’re going to do what we do so that we don’t have our hard-earned capital crash by -20-80%
The big picture
Here’s Walsh’s intro to one of the best #behavioral and coaching books I’ve ever read – The Score Takes Care of Itself:
“I would never write anything that suggests the path to success is a continuum of positive, even euphoric experiences – that if you do all the right things everything will work out. Frequently it doesn’t…”
“However, a resolute and resourceful leader understands that there are a multitude of means to increase the probability of success. And that’s what it all comes down to, namely, intelligently and relentlessly seeking solutions that will increase your chance of prevailing in a competitive environment. When you do that, the score will take care of itself.”
Macro grind
Especially in the Post-Pandemic Period, I’ve never seen the “Retail” or wanna-be “rich” investor veer so far away from the principles that were critical for Bill Walsh and his San Francisco 49ers teams to win Super Bowl Championships.
Investing, across what we call the Full Investing Cycle is never about “certainty” or “valuation” or having “diamond hands” and laser-eyes. It’s about having a disciplined process that increases the probability of success.
It’s about relentlessly seeking solutions like we have. Instead of whining and complaining about > 50% of daily US Equity Options (0DTEs) becoming a LARGE part of The Machine’s daily flow, we partnered with Tier1 Alpha to understand it.
Instead of having new players in The Game fail in ways that they can’t recover, we’ve coached them through:
A) MIN and MAX Portfolio Position SIZES, by Asset Class, in our new Portfolio Solutions product
B) Timing on adding to or subtracting from positions within Risk Range™ Signals
C) Grossing up “Stock Ideas” based TRADE and TREND ™ Signal Strength instead of analyst “conviction”
If you don’t want to play The Game that way, don’t. I’ve seen plenty of players who played at my team’s level that have left this profession since the pandemic. They either didn’t or couldn’t evolve their process for the modern day Machine.
But, if you do, keep reading. And keep grinding. Every. Single. Day.
Unlike some of those laser-eyed types who need “pumps” and “moons” in order to stop living in a van down by the river, with time and space you are going to learn a #BetterWay to preserve, protect, and compound your hard-earned capital.
Back to Mooning. It’s not like we’re not allowed to be long some of these things when they go vertical. And it’s not like being long Bitcoin (via our IBIT Asset Allocation) wasn’t up another +4.6% for us yesterday…
But how many Moon-beam Shibu Inu Dogs were long of Shipping (BDRY) yesterday? It mooned more, +5.2%!
Again, if they can’t grasp the longstanding concepts of risk management and Portfolio Diversification, let them moon. In the meantime, we’re going to do what we do so that we don’t have our hard-earned capital crash by -20-80%.
How about that #BSM btw? Here’s Moarrr Broadening, Squeezing, and Mooning in the last 24 hours:
- Broadening – our new Asset Allocation to SMALL CAPs via Russell Growth (IWO) was +1.7% yesterday
- Squeezing – Goldman’s (their clients) Most Short Basket SQUEEZED another +4.7% higher yesterday!
- Mooning – Bitcoin Sensitive Equity Basket is up +19.3% in 2 days!!!
Now, you’re not going to see me pumping a Luna Tat in the Hamptons on my old hockey Buds biceps but, thanks to my Signaling Process you will see the ole Hedge Fund Manager in me sidestep plenty of these Short Squeezes!
Some of you are old enough to remember 2021 when we were Long Gamestop (GME)…
And many of you are old enough to remember all of the Crap Retailers Brian McGough had us go from Long to Short from those 2021 moon-beam short-squeeze highs too.
It all happened, including the economic slow-down data that supported it.
Before we went long Russell Growth (IWO), the Russell 2000s Net Income wasn’t in a recession. We had that wrong. It was entering a depression!
Did you know that, as of last night’s close, 1209 of the Russell 2000’s companies had reported an aggregate Earnings Depression of -28.7% year-over-year? Where was that “call” from Telecom Tom who wore the entire 2022 Crash?
And where was I yesterday after we saw the US Durable Goods report #slow by a nasty -510 basis points to a -0.6% year-over-year recession in JAN 2024 (not a typo, that was a 42-month ROC low!)?
I was onto the #NextPlay in RTA (buying CLX and WYNN). I was buying and selling in my Long Only Portfolio Solutions Book into these epic month-end markups.
I wasn’t pumping or philosophizing. I was executing on my #process to increase my future probability of success.
Our levels
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 4.19-4.40% (bullish)
SPX 4960-5125 (bullish)
NASDAQ 15,635-16,198 (bullish)
RUT 1975-2077 (bullish)
Shanghai Comp 2850-3022 (bullish)
BSE Sensex (India) 71,751-73,594 (bullish)
VIX 12.79-15.73 (bullish)
USD 103.57-104.76 (bullish)
Oil (WTI) 76.16-79.50 (bullish)
Nat Gas 1.44-1.90 (bearish)
Bitcoin 52,234-60,775 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
