(This is an excerpt from an article written on Substack by Mark Bunting. You can read Mark's full bio below).
Absorbing Hedgeye Risk Management’s content and refining my use of their investment process is a big part of my everyday routine, which I established in part one of this series.
In this segment, I explore my healthy obsession with Hedgeye, three key things to deploy the process successfully, the significance of OODA Loops, and the reason anything you do matters.
Daily Routine
My routine starts around 7 a.m. reading Keith McCullough’s early morning tweets (he puts “two feet on the floor” every weekday morning at 4:30 a.m.), in which Hedgeye’s founder, CEO, and Head of Macro details the global market numbers he considers relevant at that hour. Everything from Chinese economic data, South African stocks, currency moves, to the gold price.
I then listen to and/or watch The Call at 7:45 a.m. - the live, behind the scenes, hour long discussion featuring Hedgeye analysts with McCullough steering the conversation starting at his home in Connecticut, then driving on the Merritt Parkway, and ending at Hedgeye headquarters in Stamford.
Then I watch and/or listen to The Macro Show at 9 a.m. - the live, 30-minute show that gets Hedgeye’s institutional clients and do-it-yourself subscribers ready for their investing day.
McCullough runs through the top three things in his voluminous notebook, references a relevant quote from a book he’s reading (he tries to read a book every 10 days on math, history or behavior), scours the investment landscape from Indian stocks to soybeans, and takes some questions from viewers.
During the show, McCullough, usually accompanied by Daryl Jones, Hedgeye’s Director of Research, is an outsized, exaggerated version of himself. He’s always informative, educational and entertaining.
In and around those shows, I read The Early Look, which McCullough writes by starting with a quote from a book that applies to a point or two related to the current market setup, or a certain component of the process, or to pound home a reminder on investor behavior to emulate or get rid of. McCullough skillfully integrates the quotes throughout Hedgeye’s daily content.
Before the market opens, I analyze the Risk Range Signals, a mix of 37 bonds, global stock indices, currencies, commodities, major tech stocks, and Bitcoin, which show the low end and top end of their risk ranges and whether they’re bullish or bearish trend within McCullough’s volatility adjusted signaling process (VASP).
Trading Day Starts
When the trading session starts and “macro tourists” have left the “kiddie pool” around 9:50 a.m., Real-Time Alerts (RTAs) often start hitting my in-box.
McCullough is buying SOME of a certain stock, for example, because it’s red and at the low end of its Risk Range within a bullish signal. Or selling SOME of an exchange-traded fund (ETF) because it’s green and near the top end of its Risk Range.
A few coaching notes from McCullough accompany these RTAs on why he’s making the move within the “Mucker Family Office” or “MOFO” portfolio, a long-only ETF account. He also sends out RTAs before the market close.
RTAs can also include individual stocks McCullough may own in a personal long-short account. He’s restricted for compliance reasons from owning any stock that Hedgeye’s analysts cover.
Later in the morning, I receive the Portfolio Solutions: Daily ETF Re-Rank, a summation of the trades McCullough has made so far that day. The update on September 11 looked like this:
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Keith's Commentary: "In the PA today, I bought 100bps FXB. Bought 50bps IAK, XLP. Sold 50bps PINK, FKU."
On Monday mornings, there’s a troika of invaluable emails that Hedgeye sends out. Two, I get through my Macro Pro subscription, and one is a new product, Signal Strength Stocks, that requires a separate subscription because it’s a Holy Grail of sorts of the Hedgeye process. (More on that below.)
The Investing Ideas - Levels list, made up of 15 longs and 10 shorts (as of September 9), updates Risk Ranges for longer-term equity ideas that are highly ranked by Hedgeye analysts and are bullish or bearish trend.
(Note: McCullough is the only person on the planet with access to these signals. He’s mentioned that his teenage son may have access, as well.)
Six of the 15 longs are real estate investment trusts (REITs). One of them is Ventas Inc. (VTR), a company that specializes in research, medicine and healthcare facilities. It’s been up 45 percent since late April. Around that time, Rob Simone, Sector Head of REITs, identified several companies seeing a positive inflection in their businesses.
Another product delivered on Mondays is the ETF Pro Plus - Levels list and Risk Range levels. This is a replica of the Mucker Family Office account showing 26 longs (as of September 9), including big winner iShares MSCI India Small-Cap ETF (SMIN), up 30 percent in the last year, and 12 shorts. (I don’t short individual stocks but will use various short ETFs.)
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ABOUT MARK BUNTING This is a Hedgeye guest contributor piece written by Mark Bunting and reposted from his Substack publication. Mark is a seasoned financial journalist with 25 years of experience in the industry. His career includes 15 years as an anchor and reporter for Business News Network (BNN Bloomberg), where he also served as London Bureau Chief for three years. He currently is the host of RCTV for Red Cloud Financial Services, focusing on interviews with CEOs and leaders in the metals and mining sector. Mark also plays a significant role at Red Cloud’s conferences, where he conducts keynote interviews and moderates panels. Additionally, he is an on-air host of sponsored content for BNN Bloomberg Brand Studio and has previously been the publisher and host of Uncommon Sense Investor and Capital Ideas Media. Mark started his career with The Sports Network (TSN). He has been a Hedgeye subscriber for three years.. View all posts by Bunting on his Substack. X (Twitter) handle: @MarkBunting_ LinkedIn: Mark Bunting |
