“Wisdom belongs to the aged, and understanding to those who have lived many years.”
-Job 12:12
If you have experience, you may or may not like that quote. For a certain type (especially on Old Wall), it depends on how successful your experience was. Certain egos aside, when my experiences aren’t good, I try to learn from them.
While it’s kind of sad (for their investors) that we don’t hear frequently from more experienced investors (greater than 20 years in this profession having seen at least 3 Cycles) about Full Cycle Investing, I think it remains a generational opportunity for those that not only get it, but educate and execute on it.
Even if you didn’t experience and/or risk manage the 2000-2002 or 2007-2009 Down Cycles well, you can read about them. You can study them. You can learn from them!
You don’t have to take my word for it. The aforementioned quote comes from one of the greatest coaches in American history: John Wooden. Near the end of his life he said:
“I still try to read something every day… I enjoy new books. I’ll read at least one a month. There was a time when I read a lot more – that is when I could read faster and could retain better than I can today…
But I won’t stand still. I will always try to move forward. I want to keep learning…”
Back to the Global Macro Grind…
You can stand still, ignore history, and just stare at 7 US #BubbleCap stocks – I think you have about 2 days left of being able to do that “successfully” like any 3-year-old yolo “investing” Pandemic Meme dude can. Just keep saying “YTD.”
Or you can setup for what both The Cycle and my #process implies the next 3-6 months will “look” like.
While I care about human beings and I really hope they “get paid” on their “YTD” or “month-to-date returns”, what I really care about is the Cycle to-date #CTD, where I got #out, WHEN I get into Asset Allocations, etc.
For me and my family, that’s really all that matters. Where’s my pile? Where is it vs. its all-time highs?
As many of you know, I went bearish on the US Economic Growth Cycle almost 18 months ago. That’s when I was buying US Dollars, and pretty much shorting everything that the Old Wall consensus blinders owned.
Now, I’m Long Japan vs. a broad basket of US Stocks (Russell 2000) which is still -24% from The Cycle’s peak.
Yes, I have plenty of other Long and Short positions (22 Longs in my Macro Pro Asset Allocation Model, and PLENTY of Macro and Single Stock Shorts on the other side of it).
My Long/Short Book is back to -1.2% Net Short. My pile is -1.4% off its all-time (24 years of investing) highs.
I have to care about The Score because that’s what’s in my accounts. What’s in yours? What are your goals? Are you allowed to “see” The Cycle? Or are you just trying to make back some of what your investors lost since NOV 2021?
Since I will never be everything to everyone (and don’t want to be!), the best I can do is help you “see” what I see. I’ll deliver that Macro Awareness in our 163 Slide Q3 Global Macro Themes deck today at 11AM ET.
If you’d like LIVE access to the presentation @HedgeyeTV, ping .
In addition to the impact of 7 #BubbleCaps that may or may not blur your Macro Awareness (AAPL has a $3 TRILLION Market Cap now which is not only greater than the entire Russell 2000, but 5 SPX GICS Level 1 Sectors!):
- I’ll review the #Quad4 US Profit Recession & Rolling Credit Event that started in the last 2 quarters
- I’ll review the Global Industrial Recession that we’ve already entered via China and Europe
- I’ll review 3 of my Top Global Equity Allocations: Japan, India, and South Korea (in that order of sizing)
I’m still young enough to learn about #behavioral and economic cycles. I still like to read. I’ve tried to maintain a pace of a book every 10 days now for 15 years of building this Full Investing Cycle #process alongside my teammates.
Everything we “see” about this Cycle will be considered within the context of long-term #history. Even though I don’t run your money and/or the hard-earned capital of your clients (if you’re running other people’s money)…
I consider it my responsibility to my God, family, and firm to help you preserve and protect your hard-earned-capital… so that you can live a Full Investing Cycle life of compounding returns without experiencing major drawdowns.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 30yr Yield 3.77-3.90% (bearish)
UST 10yr Yield 3.66-3.84% (neutral)
UST 2yr Yield 4.60-4.82% (bullish)
High Yield (HYG) 73.88-75.08 (bearish)
SPX 4 (bearish)
NASDAQ 13,235-13,832 (bullish)
RUT 1 (bearish)
Tech (XLK) 165-174 (bullish)
Industrials (XLI) 101.95-105.97 (bearish)
Financials (XLF) 32.33-33.47 (bearish)
Defense (ITA) 113-117 (bullish)
Healthcare (PINK) 25.85-26.82 (bullish)
Shanghai Comp 3140-3244 (bearish)
Nikkei 32,218-33,975 (bullish)
VIX 13.03-18.20 (neutral)
USD 101.78-103.51 (neutral)
EUR/USD 1.081-1.101 (neutral)
USD/YEN 141.08-144.32 (bullish)
Oil (WTI) 67.03-72.01 (bearish)
Nat Gas 2.38-2.98 (bullish)
Gold 1 (bullish)
Copper 3.66-3.93 (bearish)
AAPL 183-191 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
