Risk Management: A Better Approach Than Wall Street’s Massive Drawdowns

02/07/19 12:02PM EST


It seems Wall Street is perpetually stuck between the two extremes of greed and fear. Here at Hedgeye, we are constantly trying to generate alpha and protect our subscriber’s portfolios by fading consensus, “Old Wall” views.

As Hedgeye CEO Keith McCullough explains in the clip above, fighting the consensus herd will always be a tug of war, due to conflicts of interest and a lack of proper macro risk management.

“The Old Wall is not going to be long gold – ever,” McCullough explains a recent edition of The Macro Show.

“They’re never going to short SPY or QQQ and they’re always going to miss a 27 percent drawdown in the Russell. There’s nobody on Wall Street that went bullish for two-and-a-half years like we were into September, then flipped to bearish, and has stayed bearish – but went bullish on stuff that went up.”

Good news.

If you have an actual, repeatable, risk management process, McCullough continues, you can protect your portfolio throughout the economic cycle by avoiding Wall Street’s massive drawdowns.

Watch the full clip above for more.

Risk Management: A Better Approach Than Wall Street’s Massive Drawdowns - hedgeye risk manager

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