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Peterson: How to Trade Fear, Groupthink & Your Own Biases

In this excerpt from a broader “Real Conversations” interview with Hedgeye CEO Keith McCullough, Dr. Richard Peterson explains how “fear” filters into his mathematical model (“fear for a biotech stock is good, but fear for American Airlines is bad”) and how the algorithm helped his firm successfully trade fade Brexit groupthink. McCullough and Peterson also discuss their constant struggle to override their own biases.

 

Dr. Richard Peterson, a board-certified psychiatrist and CEO of MarketPsych, is among the foremost leaders in the area of applied behavioral finance. His team has developed an algorithm that crunches data from more than 2,000 media outlets and 800 social media sites to interpret investor sentiment and suggest trading opportunities. Based on that data, they put together a market-neutral social media-based hedge fund that beat the S&P 500 by more than twenty-four percent—through the 2008 financial crisis.

 

Want more?

 

Watch this edition of “Real Conversations” in its entirety below.

 


This Week In Hedgeye Cartoons

Our cartoonist Bob Rich captures the tenor on Wall Street every weekday in Hedgeye's widely-acclaimed Cartoon of the Day. Below are his five latest cartoons. We hope you enjoy his humor and wit as filtered through Hedgeye's market insights. (Click here to receive our daily cartoon for free.)

 

Enjoy!

 

1. Dominoes (10/7/2016)

This Week In Hedgeye Cartoons - GDP cartoon10.07.2016

 

Here's how the dominoes fall. Jobs growth slows => Number of Hours Worked falls => Productivity slips => GPD dips.

 

2. Trump vs. Clinton (10/6/2016)

This Week In Hedgeye Cartoons - Clinton Trump cartoon 10.06.2016

 

Political uncertainty is at historic highs across the buyside and in corporate boardrooms. Trump or Clinton... you nauseous yet?

 

3. Clown Show (10/5/2016)

This Week In Hedgeye Cartoons - Fed clown cartoon 10.05.2016

 

Fed credibility is slipping and it's not funny. It's getting downright scary.

 

4. Boob Tube (10/4/2016)

This Week In Hedgeye Cartoons - Central bankers cartoon 10.04.2016

 

We believe central bankers around the globe remain one of the biggest market and economic risks. We encourage you to take a closer look at our thoughtful suite of products which can help you navigate these treacherous macro waters. 

 

Click here to receive our daily cartoon for free.

 


The Week Ahead

The Economic Data calendar for the week of the 10th of October through the 14th of October is full of critical releases and events. Here is a snapshot of some of the headline numbers that we will be focused on.

 

CLICK IMAGE TO ENLARGE.

The Week Ahead - 10.07.16 Week Ahead


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‘Macro Mentoring’ Session 5: Macro Factors, Asset Allocation, The Cycle & More

In this week’s edition of ‘Macro Mentoring’, Hedgeye CEO Keith McCullough highlights the outlook for the U.S. Dollar , walks you through his asset allocation model as well the importance of knowing where we are within the cycle.


PREMIUM INSIGHT

McCullough: Why Mainstream Media Is Wrong About Today’s Jobs Report

McCullough: Why Mainstream Media Is Wrong About Today’s Jobs Report - TMS 10 7 Why Mainstream Media

In this no-punches pulled excerpt from The Macro Show, Hedgeye CEO Keith McCullough explains what the media missed about today’s jobs report. 


Cartoon of the Day: Dominoes

Cartoon of the Day: Dominoes - GDP cartoon10.07.2016

 

Here's how the dominoes fall. Jobs growth slows => Number of Hours Worked falls => Productivity slips => GPD dips.

 

Click here to receive our daily cartoon for free.


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Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.

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