Today of course is a big day for Ben Bernanke and his fellow Central-Planning Overlords at the Fed. Everyone is fixated on their comments, the media will be all excited, etc. You know the drill.
What do you do from here?
If you know what Bernanke’s going to say, you know more than me. Because I have no idea what he’s going to say. I do know what I think he should say, and I do know what I think he should do. But that’s an entirely different matter.
Last week, the whispers and leaks were indicating that Bernanke would push out the tapering; this week’s rumor is that he has the tapering back on. Now, if the Fed made a decision based solely from an economic fundamental (e.g. housing, consumption and employment growth) perspective, they of course should have already started tapering.
The reality here is that tapering would be good.
For the record, there’s a good reason why I’ve taken down my gross exposure to equities. I have no idea what’s going to happen this afternoon and what this guy is going to say. That’s just the simple fact of the matter. So I have to be in a position where I’m able to react to that, and I will.
You know what I’m going to do? If he tapers, and the US Dollar strengthens, you’re going to see me out there buying stocks. Of course, some people are saying, “Tapering scares me! We need the Fed to hold our hand!” Come on. Get off the pot already. Seriously. It’s been five years of this scaring the hell out of people, worrying about everything under the sun.
People are really regressive out there. I want to be progressive. I want to be invested.
Bottom line is if we get some tapering and that equates to #StrongDollar, we’re going to be doing more of what we’ve been doing successfully here at Hedgeye for the last six months. That of course is being bullish on U.S. equities and bearish on all the things I’ve already outlined like gold, Treasuries and commodities.
More to be revealed.
(Editor's Note: This was an excerpt from Hedgeye CEO Keith McCullough's morning conference call. If you would like additional information please click here.)