A subscriber expressed his concern that “seasonal tailwinds” might make our recession forecast “less likely” this morning on The Macro Show.
That’s not the line of thinking Keith McCullough uses to risk manage or make decisions. For good reason.
“I think you need to understand the process better,” Hedgeye’s CEO explains. “We have never, never paid attention to seasonality. The reason why is process. We use conditional factoring. Go to every monkey who tells you about seasonality and say, ‘If you bought stocks ahead of September and October for seasonality, what happened to you?’ You got killed. We’re not going to do that. We don’t want you to get killed.”
“If you can’t handle it, it’s not for you,” he adds. “It’s a lot easier to just believe a five-day move in the Russell, stay with seasonality and just get long. That’s easy. Really easy. But it’s also really dumb.”
Watch the full clip above.