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An important investing lesson from Hedgeye CEO Keith McCullough: modeling a stock by starting with valuation will lead you to a lot of wrong numbers and potentially some losses.

As McCullough explains in the excerpt above from The Macro Show, starting with valuation is a “classic mistake” plenty of Old Wall investors make.

“I never start with valuation. I look at valuation after I start with where growth and inflation is going, from both top-down and a company bottom-up perspective,” McCullough explains.

“People who whine that a stock is expensive usually, A) don’t own it, B) aren’t willing to buy it because they think they missed it, and C) they’re probably going to be whining about it the whole way up.”

Watch the full clip above for more.

McCullough: I Never Start With Valuation - risk ranges