In this clip from The Macro Show this morning, a Hedgeye subscriber asked a question about the setup of energy stocks in 2008 looking similar to today. While that may be true, Keith McCullough says it doesn’t influence his decision-making in the present.
“The signal is always the answer to the question,” explains Hedgeye’s Risk-Manager-in-Chief.
“There are a lot of reasons energy stocks break down in a raging bear market: There’s exit liquidity; you can’t own anything; the rate of change of oil peaks, starts to roll over, then breaks down. That all happened in 2008. It could happen now. I don’t wake up thinking about that as a primary thing. I just wake up looking at my signal.”
That also explains why McCullough took his position in Energy (XLE) down to his minimum 2% allocation.
“The signal is already getting me in better position without me having to worry about your primary concern, which is 2008,” he adds. “See the difference?”
Watch the full clip above.
