Among Wall Street’s many trite maxims is the idea that an asset’s valuation (its price-to-earnings ratio) matters in macro.
“That is not true,” explains Hedgeye CEO Keith McCullough in the video above. Here’s an excerpt:
“That is one of the many establishment convenient wisdoms that people can wake up each day, pull up the Yahoo Finance quote showing that the Russell 2000 trades at 45 times earnings and everyone in the world should know that it’s expensive and therefore it should go down. If it was that easy why does it never work?”
Don’t blindly follow the Wall Street herd's prevailing “wisdom.” Stick with what's proven and what works.
