“I train warriors, own companies, serve my country – and I’m just getting warmed up.”
-Tim Kennedy
There are very few books that get my attention on the first page like this one did. And I read lots of books.
In his opening sentence to Scars and Stripes: “An Unapologetically American Story of Fighting The Taliban, UFC Warriors, and Myself”, he starts with “my name is Tim Kennedy and I have a problem: I only feel alive when I’m about to die.”
That’s closer to real-life than all of the people who are “crushing it” in markets on Twitter. Then again, Kennedy uses his real life and real name: “I make a pretty good Rambo, but the truth is for everything I’ve accomplished, I’ve screwed up a whole lot more.”
Back to the Global Macro Grind…
Kennedy’s unapologetic, transparent, and accountable authenticity resonates with me, big time. It’s not only hard to find in this day and age of everyone doing everything “epic” on Insta, it’s much easier to believe and understand.
I’m pretty sure that if you use a 15yr plus track record, I’ve screwed up more, publicly, than anyone who risk manages and/or trades markets. In that calculation, I’m not including those who just talk about markets – they have no #timestamps.
Why put it all out there and be as proud of our wins as what we’ve learned from our losses? That’s the only way to #GetBetter.
So, on this long weekend, I challenge you to challenge yourself to be more transparent and accountable. I’m doing my best to become a better father and coach. God knows, I have a LOT of work left to do!
One of the biggest mistakes people who write/tweet about, but don’t really invest in and/or actively trade markets, is they (in their own minds) have to “be right.” That’s why the self-righteous intellectual types are who we want to play against.
To some extent this is a function of the Old Wall media game they need to play to get paid:
A) “What’s your next big call?”
B) “What’s the thesis?”
And that’s being polite about it. For CNBC types (or Real Vision with Crypto), it’s not about much more than generating click-bait. It’s all about ad-dollars, not adding alpha.
I never talk about my “thesis.” And I kind of cringe when people tell me I “made a great call.”
I’m not writing white papers or trying to be famous for a Macro “thesis” that I should objectively do the opposite of when The Cycle turns. This morning’s title of “Long Gold/Utes vs. Short Tech” is neither a new position nor a “call.”
It’s simply allocating my hard earned capital and executing within my Full Investing Cycle Process.
I have plenty of bad days, but yesterday was a good day for me. My score in The Game was good but, more importantly, I thought I had a good Macro Themes Coaching Session (ping if you’d like the replay/link).
I think I coached people through #TheProcess for 59 minutes. If that’s not for you, don’t watch it. Read Kennedy’s book instead!
If you do watch it, you’ll realize that I’ve had the discipline and patience to stay with a battle-tested Global Macro Risk Management Process that has worked, across cycles, for many years now.
Was it easy to do that in mid-March or mid-August of 2022 when the Old Wall Charts Guys were firing off emails and tweets about “breakdown charts” of the US Dollar and/or “breakout charts” of the NASDAQ?
A: No.
But it was definitely easier than the last few cycles where I had to do the same thing with A) far less experience and B) less resources, teammates, modern machines, etc.
Back to the Long Gold/Utes vs. Tech:
- I’ve held these positions since January of 2022 #timestamped
- I’ve risk managed them (i.e. traded around them within my Risk Range process)
- I’ve been re-grossing Gold (GLD) and willing to make short-term mistakes for longer-term gains
- I did the same in Utes (XLU) on red and got paid yesterday (XLU was +1.4% on the day to +5.6% YTD)
- I’d been re-grossing my Tech (XLK) Shorts throughout July and August (willing to make short-term mistakes)
- The closer you were to #BubbleCap and/or #BubbleMultiple and Profitless Tech, the better, on the short side
If you lost it emotionally because GLD was down -0.88% yesterday, consider the alternative:
A) Goldman’s “Expensive Software” Basket was down -6.5% on the day
B) Goldman’s Profitless Tech Basket was down -4.5% on the say
My largest Asset Allocation (US Dollars) was up another +0.9% to new Cycle Highs yesterday too, so I got over the GLD thing. If this morning’s US Jobs report is bad (in rate of change terms), I think I’m set up for longer-term Full Cycle gains in Gold.
If I’m wrong on that, I lose money. I’m only “right” if I make money. #Timestamped (6,689x) since 2008.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets:
UST 10yr Yield 2.87-3.30% (neutral)
UST 2yr Yield 3.25-3.54% (bullish)
High Yield (HYG) 73.64-76.06 (bearish)
SPX 3 (bearish)
NASDAQ 11,494-12,382 (bearish)
RUT 1 (bearish)
Tech (XLK) 131-142 (bearish)
Utilities (XLU) 74.13-77.61 (bullish)
VIX 21.73-28.88 (bullish)
USD 107.51-109.88 (bullish)
EUR/USD 0.991-1.009 (bearish)
Oil (WTI) 86.16-95.44 (bearish)
Gold 1 (bullish)
Copper 3.32-3.62 (bearish)
Bitcoin 19,406-22,246 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
