“A lot of people are afraid of commitment because it means they’ll have to say that’s the best I can do.”
-Pat Summitt
That quote is from one of the best #behavioral coaching books I’ve ever read: Sum It Up, by Pat Summitt. She wasn’t talking about winning basketball games. She was talking about how she felt about getting married!
But, like anyone (like crazy me) who’s obsessed with consistency in living life the same way you play The Game, she quickly transitioned into a fast break, differentiating herself vs. the competition.
“They elect to be average. When you want something and you compete (at the highest level), you decide to find out what your real limits are, not just what you think they are.” (pg 119)
Back to the Global Macro Grind…
If you want to be average at the investing game, get in line. The number of “retail” and/or one-dimensional Old Wall 60/40 investors who don’t have it in them to push their real limits might be the biggest bubble of them all.
You can spend 3 minutes on my Twitter handle and see nameless amateurs in outright panic and/or disbelief that KM “The Perma Bear” is making money on SPY Monkey up days.
I, of course, like to troll and trigger them. Last night, before I went to bed, I posted a tweet called “The Pro’s Position” = Long SPY Momo (SPMO) vs. Short Russell (IWM), and my haters went ape!
LOL
Should we NOT show and/or discuss the positions we have in our accounts? Should we waste any of our precious life and Cycle Time trying to explain something to a monkey who wants/needs us to lose?
A: Nope. We just keep executing with our hard-earned capital as we keep learning from our mistakes.
What did we do for The Fam in the accounts yesterday?
- Sold All of the Colombia (GXG) position in order to make room for PFF
- High yielding US Preferred Stocks (PFF) was nearing the Low-end of my Risk Range
- GXG broke immediate-term TRADE support and PFF has developing ™ Signal Strength
Never mind the 1-dimensional laser-eyed dudes, was an EM Equity to Preferreds pivot an Asset Allocation move that anyone on Wall Street was “making a call” on yesterday?
A: Nope. We don’t “make calls.” We execute on the Go Anywhere Full Investing Cycle #process, daily.
Whether they’re amateurs on Twitter or professionals sitting down the hall from you, why would you care about what they’re doing?
Keep pushing yourself to do what you do. Your real limits as an investor aren’t what they used to be.
What else is going on today?
A) China printed a DEFLATIONARY headline INFLATION report of -0.8% y/y for JAN
B) China continues to slow towards the LOWEST level of GDP Growth in over 20 years
C) China’s 10yr Bond Yield looks just like that #slowing growth rate, right at 20 year lows
China’s kind of a big place, no? What does a SPY Monkey know about that? Who cares?
We remain Short of China in Hong Kong terms (EWH) and the Hang Seng dropped -1.3% on the “news” that we’ve been not only front-running with our - Street Low - China GDP Nowcast, but stayed with it, patiently.
We’re also Long India (INDA), Philippines (EPHE), Australia (EWA), and the Netherlands (EWN) against it.
‘Oh, but KM… you said that a US Recession was…’
Remember the scene from Dumb & Dumber when they pick up the hitchhiker and Jim Carrey gives the dude “the most annoying sound in the world” then starts singing“buy me a Mockingbird”?
Send that to my haters as my reply.
Yes, I thought the probability was rising for a US Recession in 1H of 2024 (it was). And yes, I am dumb. But I am not dumb enough to lose my hard-earned capital when I’m wrong. I use my risk management tools to pivot.
Nailing China (again) this year is a position not all hedge funds have. There are some “big picture” Macro Theme oriented competitors of ours who have been wearing that trade the whole way down because its cheap.
Yes, it’s “cheap.” Cheap generally gets cheaper when growth is slowing to its slowest spot.
And, yes, at some point I’ll be Long of China and my trolls are going to be telling me I’m still short.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.87-4.17% (bearish)
UST 2yr Yield 4.19-4.50% (bearish)
High Yield (HYG) 76.75-77.70 (bullish)
SPX 4 (bullish)
NASDAQ 15,251-15,819 (bullish)
RUT 1 (bearish)
Tech (XLK) 198-207 (bullish)
Insurance (IAK) 105.04-108.00 (bullish)
S&P Momentum (SPMO) 70.23-74.99 (bullish)
Healthcare (PINK) 28.21-29.91 (bullish)
Shanghai Comp 2 (bearish)
BSE Sensex (India) 70,688-72,708 (bullish)
VIX 12.44-14.14 (bullish)
USD 103.13-104.71 (bullish)
Oil (WTI) 70.60-75.81 (bearish)
Gold 2014-2082 (bullish)
Copper 3.68-3.90 (bearish)
Uranium (URA) 29.52-32.45 (bullish)
MSFT 399-418 (bullish)
NVDA 649-720 (bullish)
Bitcoin 42,008-45,003 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
