“What’s up, Gerbs? $TSLA”
I woke up at 330AM PST this morning (sorry for the Late Look!) in California to being chirped on Twitter by The Gerbs (Ross Gerber)… and liked it. For those of you who don’t know who that is, look him up on Tesla (TSLA). He’s a beauty.
While I have a few ideas on why I stir emotions in certain Old Wall men, it’s always good to know that in 11 years of building Hedgeye, I never quite turned out to be who my haters hoped I was.
Enough about me. This really isn’t about me. It’s about creating a better way – a repeatable and data driven #process that disrupts The Establishment. If we aren’t rattling their cages, we really aren’t building something disruptive and new.
Back to the Global Macro Grind…
What’s up in May? Treasuries, bro.
While I don’t think I’ll ever teach a certain type of an Old Wall “Stock Picker” like Gerbs how (and when) to re-allocate client capital to Treasuries when the US economy is tilting into Quad 4, I’m certainly glad I taught myself how to do that.
I don’t know about you, but back in 2008 I really wasn’t equiped, experienced, or prepared to “Buy Treasuries” like I’ve done at the appropriate times in the last 5 years.
As a trained baby bear (I was a buy-side hedge fund analyst) during the US #EarningsRecession of 2001-2002, my “big call” when we started Hedgeye in 2008 was to just short the US stock market and get long cash.
While that worked, I could have made a lot more money if I knew what I was doing, across asset classes.
What’s amazing to me now is how many “star” Fixed Income managers get epic moves in the bond market wrong. I’m especially fascinated with the ones who are older and more experienced than me. They’ve seen more cycles!
With each Economic and Market Cycle, you have a wonderful opportunity to learn from your mistakes.
How on God’s good earth can people who are in the business of being LONG (only) Bonds, miss classic #PeakCycle (Quad2) opportunities to buy Treasury Bonds?
With “stocks”, I get it. There are the style biases, investment processes, and marketing decks that give you many different flavors and opinions on what a portfolio of equities can look like across different durations…
But with big things like Treasuries and US Dollars, c’mon bros!
If you want to get:
- The World’s Reserve Currency (US Dollar) and
- US Treasuries right
You have to get TWO words right: QUAD FOUR
Yes, it took me 15 years to figure that out. God willing, by the year 2025 (my 25th year doing this gig), our (and your) competition still hasn’t figured this out. Beating The Machine is no game for Old Wall Men.
Our immediate-term Global Macro Risk Ranges (with intermediate-term TREND signals in brackets) are now:
UST 10yr Yield 2.22-2.42% (bearish)
UST 2yr Yield 2.04-2.23% (bearish)
SPX 2 (bearish)
RUT 1 (bearish)
NASDAQ 7 (bearish)
Utilities (XLU) 57.33-60.18 (bullish)
VIX 14.09-20.24 (bullish)
USD 97.11-98.33 (bullish)
Oil (WTI) 56.47-60.89 (bearish)
Copper 2.61-2.74 (bearish)
Bitcoin 6 (bullish)
Best of luck out there today,
Keith R. McCullough
Chief Executive Officer