“Hard choices, easy life. Easy choices, hard life.”
-Jerzy Gregorek
It’s easy to own what everyone else does when we’re in a booming #Quad2. It’s hard to get out if you have nowhere else to go. #Quad4 made for hard choices (book #Quad2 gains, pay capital gains taxes) but easier future absolute and relative returns.
You can think of your physical health the same way I think about preserving and protecting your hard-earned capital. God willing, that’ll make for harder choices and an easier life too.
I was introduced to Jerzy through Tim Ferriss’ Tribe of Mentors. He “emigrated from Poland to the USA as a political refugee in 1986. He subsequently won 4 World Weightlifting Championships and established 1 world record” (pg 113). He became a poet too.
Back to the Global Macro Grind…
It was easy to own AAPL alongside everyone else at this time last year. It was the 1st Uniquely American #BubbleCap to have > $3 TRILLION in market cap. Now it has less than $2T and is making life really hard for those trying to preserve and protect capital.
There was a time way back then (coming out of #Quad2, when you should have been long both GROWTH and INFLATION for the prior 6 QUARTERS) when both Microsoft (MSFT) and Saudi Aramco had #BubbleCaps of > $2 TRILLION too.
#HardLifeForPemaBulls since…
While it’s hard to leave the shackles of an inflexible investment strategy, it’s easy to have a Go Anywhere one where your family’s hard earned net worth can be built on objective, data-driven, flexibility.
Reiterating Long Precious Metals (GLD, SLV, PPLT, etc.) vs. Short #BubbleCaps (AAPL, TSLA, MSFT, AMZN, etc.) this morning.
Who owns Precious (GDX, SIL, GDXJ, etc.)? Who owns Anti-Beta (BTAL)? You do. And you like it. Because it’s making your life easier than trying to justify owning what everyone else has to keep selling.
It wasn’t just AAPL (-4%) and TSLA (-15% intraday) that were getting pounded yesterday. Last year’s winners (which didn’t include Junior Silver Miners, SILJ!) were down big time vs. mainline US Equity Beta (SPY) which was down for the 17th day in the last 23.
Goldman’s got brokered baskets for everything at this point. If you look at their “12-Month Rolling Winners” basket, it was down -2.8% for Game 1 of 2023. Consensus Long Sector Style (Energy, XLE) was down more than that at -3.5%.
Serious Question for serious people who want to save and make money (in that order): Who gets you out?
A) After being Long Commodities as an Asset Class for 2 years (June 2020-June 2022), we got #out of that
B) After being Long Energy Stocks into early Q4 of 2022, we got #out of that
C) After being long of TLT for like 2 days in DEC, thank God I got #out of that!
And no, I’m not all that. I’m just better than the alternative. A certain type hates me for that. Obviously not because of my hair, or my 4 children. No, no, no. What they really hate on is some part of themselves that they know could/should be better.
So today is Game 2 of 2023 and it’s onto making the next best plays we can (to setup for tomorrow’s game)…
Since I like to risk manage my positions (i.e. trade around them), ironically, I’ll be doing the opposite of everything I just wrote – just for a day or two, eh. Because A) I should and B) I can:
- Covering-SOME of my AAPL Short towards the LOW-end of my Risk Range = $123-134
- Covering-SOME of my XLK and XLY which are laden with MSFT and TSLA exposure
- Selling-SOME GLD, SLV, GDX, SIL, GDXJ, SILJ towards the TOP-end of my Risk Ranges
Buying, Covering, Shorting, Selling SOME at the LOW and TOP ends of my Ranges – what a novel concept. Not really. That’s why I’m not even close to all that. I’m neither the “smartest” nor the “nicest” player in The Game. It’s just one of the most disciplined.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.56-3.96% (bullish)
UST 2yr Yield 4.20-4.45% (bullish)
High Yield (HYG) 72.52-74.48 (bearish)
SPX 3 (bearish)
NASDAQ 10,191-10,718 (bearish)
RUT 1 (bearish)
Tech (XLK) 119-126 (bearish)
Consumer Staples (XLP) 73.70-75.62 (bullish)
Utilities (XLU) 69.27-71.98 (bullish)
VIX 20.18-25.11 (bullish)
USD 103.25-106.85 (bullish)
CAD/USD 0.729-0.740 (bearish)
Oil (WTI) 74.01-80.81 (bearish)
Nat Gas 3.89-5.41 (bearish)
Gold 1 (bullish)
Silver 23.19-24.94 (bullish)
MSFT 232-244 (bearish)
AAPL 123-134 (bearish)
AMZN 80-87 (bearish)
TSLA 99-129 (bearish)
Bitcoin 16,333-17,058 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
