“Oh my God, I want to be just like them!”
- Dua Lipa
I can’t believe I just did that. I can’t believe it, really. I cited Dua Lipa to start an Early Look! Can you believe that some people “couldn’t believe” yesterday’s US Inflation report and that rates were ripping? Bahaha
Hashtag MOTHER OF ALL #QUAD2 INFLATION just went all CAPS on them!
Back to the Global Macro Grind…
No worries, I’ll get to the panicked Portfolio Manager part of this momentarily. But first, let’s take a step back and explain why a Macro Tourist and/or Linear Econ would be “surprised” by yesterday’s headline CPI #acceleration:
A) They either believe the government’s definition of inflation to begin with … or
B) They have no idea but are just reacting to headline “news” as they do most things macro
Everyone knows the US government’s headline CPI calculation changes almost anytime something really inflates. It’s a BS number. But BS matters, because if you get the ROC (rate of change) of the BS right, you get big things like long-term bond yields right.
If you’re doing your job, measuring and mapping the ROC’s on big things like Lumber, Copper, Corn, etc. #InflationAccelerating, you know that yesterday’s +4.2% headline print is understating real world inflation, BIG TIME.
Oh yeah, going all CAPS on you again, BIG TIME!
But, but, is it “transitory”, KM? Is it something the Fed is going to address after it moved? Should we sell ALL our stocks and cry to our mommies until it stops?
Seriously, get a hold of yourselves, take a deep breath, and carry on with your patient and diversified Full Investing Cycle portfolio that doesn’t give a damn about our returns being called transitory. Let’s call these returns REALIZED.
To be clear, I lost money yesterday. My MFO’s (Mucker Family Office) main long/short account lost 32 basis points of my family’s hard earned capital. If I was a Tourist, It would have been a LOT worse. Realized Alpha yesterday was highlighted by:
- Commodities (CRB Index) INFLATION closing at a new CYCLE HIGH
- Energy Stocks (XLE) INFLATING another +0.5% to +38.6% YTD
- Short Duration (TLT), Gold, and Utilities (XLU) getting you paid on the short side, again
Oh, but your favorite story stocks got plowed… I feel so bad for you…
I didn’t hear anyone complaining and/or whining about their super fav story stocks from NOV-FEB. But now? OMG, look at those charts. They’re “breaking down” vs. a 50-day Moving Monkey!
Seriously, we all have issues with our stock pics. Deal with them.
And thank the Fractal Gods of Global Macro that you got the biggest part of your Full Investing Cycle Asset Allocations right. That’s given you a healthy lead over most of your competition since #Quad2 started in NOV 2020. And now you need to do the real work.
I mean do the real SIGNAL and POD work on your fav equity names:
A) Is POD 1 (REVENUE) going to #accelerate or #decelerate from here … and
B) Is POD 2 (Cash Flow, EPS, etc.) going to #accelerate or #decelerate from here
If it broke my intermediate-term @Hedgeye TREND Signal (like AAPL, AMZN, NFLX, TSLA, BLOK, MSTR, etc. already did PRIOR to yesterday’s move), they were already GONE. That’s right, CURBED!
“OMG, did he just write that about my fav stocks?”
YEP. ALL CAPS, CURBED. I don’t fall in love with single stocks. They are simply a means to my ultimate end which, God willing, will end on the wrong side of the grass with Full Cycle Investing returns that compounded like being LONG INFLATION just did.
As for everyone else’s performance problems and emotional baggage on days like yesterday, I just don’t have that much time left on my clock. Life is too precious to waste it worrying and wondering about everyone else’s “why’s”…
WHEN matters a lot more to me than anything else. If/when the US Equity Fear (VIX) fails AGAIN @Hedgeye TREND resistance, you’re going to want to be “just like them.” You know, the cool kids in #HedgeyeNation who buy the damn dips.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.59-1.74% (bullish)
SPX 4028-4240 (bullish)
RUT 2115-2316 (bullish)
NASDAQ 12,921-13,667 (bearish)
Tech (XLK) 129.12-137.98 (bearish)
Energy (XLE) 50.28-54.80 (bullish)
Financials (XLF) 35.89-38.18 (bullish)
Utilities (XLU) 63.80-67.10 (bearish)
VIX 15.99-29.72 (bearish)
USD 89.81-91.38 (bearish)
Oil (WTI) 63.60-66.64 (bullish)
Gold 1 (bearish)
Copper 4.52-4.85 (bullish)
AAPL 121-129 (bearish)
AMZN 3006-3298 (bearish)
NFLX 471-511 (bearish)
TSLA 566-676 (bearish)
Bitcoin 49,305-58,992 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
