“Your strongest moments will often make you think of your weakest.”
-David Goggins
Are you Bearish Enough? Going from -3.3% to -15.8% Net Short into this month-end markup, I am.
I like Goggins. And I like that quote. For going on 16 months now, every time we get one of these bloody Bear Market rallies, I ask myself if I positioned aggressively enough on the Short Side into strength.
Is being a bear for this long easy? Nope. If it was, you wouldn’t see so many bears going “bullish” right now. As Goggins explained in Never Finished: “Whatever popped up in front of me had to be dealt with head-on because the full-time savages see everything in life as an opportunity to learn, adapt, and evolve.” (pg 107)
Back to the Global Macro Grind…
By definition, a real bear is a savage.
I didn’t get up at 4:35AM every day this week to be mediocre. I’m not here to have popular Talking Points or get “Institutional Investor” votes. I’m not here for any other reason than trying to prove that my way is a #BetterWay.
When I go to 1 Long and 17 Shorts in Real-Time Alerts (RTA) like I did into yesterday’s marked-up close, I’m not making an Old Wall “call.” I’m executing on my #process and I am taking my Long/Short Book position.
For those of you who are new to this, RTA is not a portfolio. It’s a daily Coaching Tool that signals both my thoughts and process in real-time with real timestamps:
A) Going back to March 23 when there was blood on Wall Street, I am 48 for my last 50 closed RTA positions
B) The average of the 2 (of 50) losses is -0.35%
C) My all-time batting averages across < 8,000 signals = 78.62% Long Side, 77.79% Short Side
Not bad for a washed up paper trading guy who got fired from a hedge fund (Carlyle) in 2007 for being “too bearish”, eh…
“Oh, but KM… you’re still short TSLA and that one went against you… so, the rest of your career at bats don’t matter.”
Yep, I get it. Especially if you’re some rookie-wanna-be Short Seller who doesn’t understand how to not only trade around but size and diversify your short book, you probably just lost 30% of your account in 1 short position and were Long Luna Coin too.
*Veteran Short Seller Note: no single stock is EVER > than a 3% position in my Short Book.
For the record, my prior 6 SELL Signals on TSLA were winners and my all-time batting average on Long/Short TSLA is 75.9% (on 4 at bats from the Long Side and 24 from the short side). So I get that this hasn’t been my best name.
“Oh but, if you look at slugging percentage … and what I think about batting averages… and all my emotions…”
Cry me a river. I’ve heard every criticism and compliment on what my 15 years of timestamping means to everyone who won’t show their timestamps. And I have 3 words for both the good and the bad: I don’t care.
All I care about is trying to #GetBetter.
And I think, during this most recent bear market rally into month-end (batting 96% on my last 50), I did.
Is it ok to talk about performing at the highest level of The Game? It better be. If you don’t want to talk about your short and long-term performance across the Full Investing Cycle, I don’t want to play with you. I want to play against you.
In addition to having a few screws loose, Goggins and I have a few things in common:
- We grind. You may beat us in a short-term thing. But we won’t go away and will grind you down long-term
- MOAB. Goggins finished 2nd in that 240 miler. And I have Mother of All Bubbles #MOAB to run again today
If my competition thinks that… after grinding through 130 Slides in our Uber Bearish Q2 Macro Themes deck this week… that I’m not going to go to my MAX positioning (-25% Net Short) if they give me the opportunity, they are out of their minds.
Today is Game 62 of the 2023 Season. That means we’re only 25% of the way into the 2023 Phase of The Bear Market. While I have no competition who has #timestamped every move and thought since 2008, I do have the internet.
At the end of March of 2008, this was his call, not mine: “JP Morgan Chase & Co’s Thomas Lee: Stocks Will Rise Much Higher by the end of 2008.” I couldn’t make that up if I tried.
And, for the record, that is the track record. I don’t compete with Telecom Tom. I play for you and I compete against me.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.33-3.64% (bearish)
UST 2yr Yield 3.71-4.30% (bullish)
High Yield (HYG) 72.78-74.86 (bearish)
SPX 3 (bearish)
NASDAQ 11,468-12,061 (bearish)
RUT 1 (bearish)
Tech (XLK) 140-149 (bearish)
Gold Miners (GDX) 29.50-32.99 (bullish)
Shanghai Comp 3 (bullish)
VIX 18.62-25.41 (bullish)
USD 101.80-104.01 (bullish)
CAD/USD 0.724-0.739 (bearish)
Oil (WTI) 66.86-74.90 (bearish)
Oil (Brent) 71.90-79.91 (bearish)
Nat Gas 2.01-2.48 (bearish)
Gold 1 (bullish)
Copper 3.88-4.15 (neutral)
Silver 22.21-24.17 (bullish)
Bitcoin 22,831-29,470 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
