“What we’re told the “experts” think can be very, very, wrong.”
-Alex Epstein
In the controversial math/science/history book I cited last week (it shouldn’t be all that controversial btw), Fossil Future, what I’m enjoying most isn’t so much what Alex Epstein thinks, but how he thinks.
“As a philosopher who has studied the history of ideas extensively, I have long been haunted by the fact that some of the worst ideas in history (such as slavery, racism, and eugenics) were successfully spread as the consensus of the experts.”
“Most of the time, when what we’re told by “experts” turns out to be wrong, it’s not because most of the actual expert researchers in the field are very wrong… it’s because the system we rely on to TELL US WHAT EXPERTS THINK is significantly distorting what the actual experts (and the data) think.” (pg 9)
Back to the Global Macro Grind…
So, I gotta a guy who thinks XXX about XXX Macro Theme. Wanna buy some and HODL it for-evah?
While that might sound ridiculous to The Rooster (because he’s never worked for anyone but me, doesn’t read anyone’s narrative based “research”, and only focuses on our Signals/Data across 2,000 ETFs, daily)…
That’s the baseline for what sells on the Old Wall as “Macro Ideas.”
Oh, so you gotta guy who says you gotta buy China, because it’s cheap?
Did the guy (and why are most of these people sending around easy to “understand” narratives mostly guys btw?) have you short China for the last 2 years telling why it was going to get really cheap?
We understand why narratives sell. Without any experience or risk mgt process they’re easy to believe.
Personally, I wouldn’t believe myself on any Global Macro Asset Allocation if my #VASP (Vol Adjusted Signaling Process) and Quads are going against me, at the same time.
That’s why we start with A) SIGNAL and B) QUADS, in that order.
So allow this guy from Thunder Bay, Ontario (if you really do Macro, you know that’s not in California) to tell you why you gotta buy a bunch of EM Exposures to countries he knows absolutely nothing about.
That’s right. I know nothing. I have never been to Saudi, Turkey, or Malaysia. And I’m Long all three.
In fact, let’s just get right to the vein on my EM (Emerging Markets) Global Asset Allocations. Long India and the Philippines are the only 3 Asset Allocations out of 8 that aren’t new (I double-dipped on India):
- Long India (INDA)
- Long Small Cap India (SMIN)
- Long Philippines (EPHE)
- Long Turkey (TUR)
- Long China (FXI)
- Long KEMX (EM ex-China)
- Long Saudi Arabia (KSA)
- Long Malaysia (EWM)
Why?
A) All 8 of these Macro Asset Allocations are Signaling Bullish on my TREND duration
B) All 8 of these Macro Asset Allocations are nowcasting #Quad1 or #Quad2
That’s pretty much it. Any questions?
Yeah, I get that the Quad Count for some of these Country Exposures are stronger than others.
China and Turkey, for example, are coming out of longstanding economic slowdowns and could/should hit another shallow #Quad4 on the way to the promise land of #Quads 1 & 2.
But check out Saudi Arabia’s Quads. Sexy. Five straight quarters of #Quad1 or #Quad2, eh!
I always thought that evolving Old Wall “Discretionary Macro” was going to be done best with a Canadian hockey accent and a coaching hoodie. It’s just a #BetterWay, eh!
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 4.18-4.37% (bullish)
UST 2yr Yield 4.53-4.75% (bullish)
SPX 5001-5176 (bullish)
NASDAQ 15,765-16,401 (bullish)
RUT 2003-2097 (bullish)
Tech (XLK) 203-213 (bullish)
Insurance (IAK) 109.75-112.17 (bullish)
S&P Momentum (SPMO) 74.16-79.80 (bullish)
Healthcare (PINK) 29.49-30.67 (bullish)
Shanghai Comp 2 (bullish)
BSE Sensex (India) 72,386-74,053 (bullish)
VIX 12.54-15.25 (bearish)
USD 103.61-104.26 (bullish)
Oil (WTI) 76.40-80.24 (bullish)
Gold 2047-2135 (bullish)
Copper 3.81-3.92 (bullish)
Uranium (URA) 26.72-28.76 (bearish)
AAPL 173-181 (bearish)
AMZN 170-181 (bullish)
GOOGL 130-141 (bearish)
NVDA 775-877 (bullish)
Bitcoin 55,586-70,245 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
