Darius Dale’s Outlook for 2021

Published on
January 5th, 2021
Duration
48 minutes


Darius Dale’s Outlook for 2021

Investment Ideas ·
Featuring Darius Dale and Ed Harrison

Published on: January 5th, 2021 • Duration: 48 minutes

Darius Dale, managing director of Hedgeye Risk Management, joins Real Vision managing editor Ed Harrison to share his outlook for 2021. Dale provides a strategic update on growth, inflation, the U.S. dollar, and interest rates, describing how his views on these macro variables affect his analysis on bonds, equities, credit, and emerging markets stocks. Filmed on December 18, 2020. Key learnings: For the near-term, bond yields will likely rise as the economy enters a "Quad 2" regime (where growth and inflation are accelerating at the same time), and as such, equities and credit will perform broadly while duration-sensitive equities could "get smoked." However, a slowdown in growth in the third quarter of 2020 could derail a market rally and separate stocks with true and lasting earning potential from those who were merely "riding the down-dollar wave." Looking farther afield, Dale sees sustained risks for the U.S. dollar and accordingly is bullish on emerging markets such as Brazil and India.

Comments

Transcript

  • RD
    R D.
    5 January 2021 @ 12:50
    I have nothing against Darius Dale personally, but any interview with a Hedgeye representative needs to begin and end with the only question that matters: why did Hedgeye take $1.5 million in PPP loans while their CEO (Keith McCullough) brags on his show about flying around in a private jet and "never having big drawdowns"? That is $1.5 million Hedgeye took from U.S. taxpayers. https://www.washingtonpost.com/graphics/2020/business/sba-ppp-data/
    • TE
      Thomas E.
      5 January 2021 @ 16:18
      Haters be hating. What about all the other companies that took PPP loans? The airlines that took Billions in government money after using Billions to buy back shares? Why didn't they save the money for a rainy day? Why do so many American businesses use debt financing to lever up their balance sheet but never consider having a cash cushion like Microsoft or Apple? Why were so many stimulus checks sent to dead people or fraudulent claims paid out all at the expense of taxpayers. Ever consider how much in taxes Hedgeye or Keith has paid? In my opinion he's just getting his tax money back just like everyone else has including you! If that loan means he kept everyone on payroll then he did what he was suppose to do - keep people employed.
    • LS
      Lemony S.
      5 January 2021 @ 16:23
      I'm critical of McCullough because of various parts of his personality and I think insecurities being Canadian, but I'll also defend him here. It's hard to blame people to use the system to their advantage after they've been abused by it - you're just a sucker if you don't play the same game everyone else is. As Thomas says you can't hold him to a different standard, just because.
    • DA
      David A.
      5 January 2021 @ 18:11
      I think you make a fair point. It's not a moral issue but a credibility issue.
    • RM
      Robert M.
      5 January 2021 @ 18:45
      Hard to blame someone for taking free govt money. Clearly the PPP program was poorly implemented with many businesses needing money and not getting it and other businesses doing just fine getting free dollars. I hate the argument "they are just getting a refund of taxes paid in the past". This thought disregards that we have a cost to running this nation and businesses get to do business in the best country (legal framework, infrastructure, work force) in the world. So to suggest that anyone that has paid taxes in the past deserves them all back is just an indirect support of MMT and that nobody should pay taxes to support the operation of the country.
    • lf
      liam f.
      7 January 2021 @ 21:59
      wow
    • ar
      andrew r.
      11 January 2021 @ 16:00
      Darius has railed incessantly against "Wall St. Socialism." If this is true about PPP, he needs to explain himself.
  • PD
    Pierre-Luc D.
    6 January 2021 @ 02:15
    Does anyone know if Raoul has sold some of his March 19 TLT calls at $170? I took a small position following him mentioning it, but I am currently down 77%. Is he expecting a reversal of the curve steepening trend in the next couple of months?
    • PB
      Paolo B.
      6 January 2021 @ 04:19
      He did not. $TLT is gaining momentum though. It may soon start heading higher
    • Dv
      Daniel v.
      6 January 2021 @ 12:52
      TLT gaining momentum??? On which chart?
    • DW
      Daniel W.
      6 January 2021 @ 14:34
      ...and which direction?
    • PD
      Pierre-Luc D.
      6 January 2021 @ 16:21
      He must be down even more than myself since the price of these TLT call options was and is still going down since I bought some... Based on the way he pitched the idea, he did not seem to have the highest conviction in this trade and I sized my position accordingly (sub 1%). Raoul seemed to hope for TLT @ 200 by the expiry date though.
    • AI
      Andras I.
      6 January 2021 @ 23:51
      I had the feeling when he mentioned those trades that he had been checked out of reality and was waving at us from on board the BTC bandwagon (sorry, bullet train)...but being RVpro a (somewhat, hopefully) professional service, he had to come up with something: hence the eurodollar and TLT bets.
    • GG
      Gary G.
      8 January 2021 @ 00:22
      I posted the short ZN, short dollar, long EM and few others on the exchange a while ago.
    • SB
      Sukhmeet B.
      11 January 2021 @ 06:11
      According to Hedgeye that’s totally opposite. I would buy calls on XLK XLE EMs he listed and get all you money back. So happy I got their service. Legit had to unload gold to bring my whole account above par
  • AP
    Antonio P.
    7 January 2021 @ 16:50
    Does this guy work for the arrogant ex macro hedge fund manager who said to short bitcoin at US$15,000? I know: not his fault! The worst is that very subtly Raoul tried to persuade Keith to go easy on an interview but... the rest is history...
    • LB
      Luca B.
      9 January 2021 @ 19:35
      Short Bitcoin? He never said this. Never ever. This is the result when people don’t pay attention. End of September he sold because according to the process it was the right time to sell. A couple of weeks ago bought it back, again, according to the process. He is long and he basically demonstrates it every damn day.
    • DM
      Don M.
      11 January 2021 @ 00:14
      I subscribe to Hedgeye and can say that no one ever suggested shorting bitcoin. They did say to sell and a week later said to buy it back.
  • DB
    Dan B.
    8 January 2021 @ 23:43
    I find that the Hedgeye process & Real Vision framework works best! Darius is top notch!
  • lf
    liam f.
    7 January 2021 @ 22:04
    Can't understand the hate for Hedegeye on this thread (granted the PPP loan is pretty despicable). Darius is excellent. They execute on a high quality, probability / quant based process. It is not perfect and does not claim to be. Ok I sort of get it with Keith's polarizing personality and the PPP loan. But good investors have to listen to the best minds available and sometimes - often - that means listening to douchebags, people you don't like and people you may disagree with on many levels!
    • lf
      liam f.
      7 January 2021 @ 22:06
      I trust Hedgeye team's calls and their honesty with the confidence level placed on those calls. They flip all around when they are not confident - which is honest. So many contradictions in what I am writing if you interpret it that way but hey, that is finance.
  • AA
    Alberto A.
    6 January 2021 @ 03:00
    I have subscribed to Hedgeye for a couple of years. It has great content and it provides a great forecasting view of the macro themes, demographic trends, etc. In respect to trading, it depends what is your timeline. If you are a day trader it might work for you. The biggest problem that I found is that once you learn their "unique" blackbox "machine" 4quadrant methodology to spit out the numbers, then you are stuck buying their subscription forever. It is not teach them how to fish kind of thing...but the thinking is great if you are a macro trader to complement your own thesis. I'm also an options trader and the difference once you learn an understand the probabilities and mechanics of trading options you can "fish" all the time! .....also there is a big different following a narrative (Raoul, Kiril, Julian, etc) versus following a quant style hedgeye nation (the ladder needs the black box!) BTW....I stopped watching the Macro Show...but prefer reading the Early Outlook....for some reason is too early for me to listen to Keith give his Master Classes....Darius is different and should go independent and not get the bad "mockering" habits! ...
    • RM
      Robert M.
      6 January 2021 @ 17:18
      When I have watched Keith interviewed on RV, was impressed. But when I watch the Macro Show feel like I am watching a medicine man pitching product. Guess it works for some but not for me. So have never subscribed.
    • PD
      Pierre-Luc D.
      6 January 2021 @ 19:18
      Same for me, I watched their show a few times and I can't handle Keith's style in his show (it is better when he gives interviews on RV).
    • lf
      liam f.
      7 January 2021 @ 21:57
      Enjoying the Macro Show and Hedgeye entails a lot of douche bag tolerance (Keith). I think it is worth it for the high quality of the content for someone who as trouble buying and holding for years based on a narrative. They have a great record. But not enough for me to pay for the full subscriptions as I'm cheap! Darius is some sort of genius on the other hand - more articulate and informative. Can't get enough of this guy!
  • AK
    ASHAY K.
    7 January 2021 @ 21:40
    Love them or hate them. It doesn't matter. The fact remains that Hedgeeye is the only game in town offering institutional quality investment and risk management ideas for retail audience. Their time stamped trade ideas as well as important turning points in the macroeconomic cycle is for everyone to see. Having subscribed to hedgeye both as an institutional investor as well as a retail investor, I would say its very important to understand their methodology and figure out how to fit it in your investment process and time horizon. Investors who go by 'feelings' and the 'narrative cycle', which sadly is how traditional media potrays investing, will never appreciate what they do. However, having been on the institutional side of investing, the only way to have sustained success in macro investing is having a process. The very fact that they survived for the past 10 years when big famous macro hedge funds were closing left, right and center provides a testament to their process. This game is about numbers. Whether you love or hate the personalities involved doesn't matter. The numbers speak for themselves. Darius stands out in his data driven methodology unlike the macro talking heads who just 'feel' things.
  • JM
    John M.
    5 January 2021 @ 19:02
    Nice interview. Keith exited gold miners and gold in October (I believe) which was a good short term call. BUT gold is now back above $1.900 & miners are now doing very nicely. I wonder if they got back in? Very short term perspective - I have trouble following them. Very little said about gold (just Bitcoin! as a store of value).
    • RD
      R D.
      5 January 2021 @ 20:09
      Having followed him for 2 years, I've realized Keith & Hedgeye are a great contrarian indicator. Whenever Keith panic sells something that you believe has long-term value, that's generally a phenomenal time to buy the dip. That happened when Keith pooped his pants on long-term treasuries in mid March and sold TLT at the precise bottom, it happened again when Keith/Hedgeye continued shorting stonks all the way through the summer of 2020, it happened again when Keith proudly "sold all his BTC" in September 2020, and again recently when Keith/Hedgeye told their subscribers to sell gold in December and consider shorting it. Bravo Hedgeye!
    • TE
      Thomas E.
      5 January 2021 @ 20:29
      @ R D - your ignorance is astonishing. In mid March did Keith exit his TLT position? Yes. When everything correlated to 1 meaning stocks and bonds we both going down and the market was in free fall. It's call risk management. You conveniently forgot to mention he was Long TLT since the beginning of 2019 and already had a 50% gain in the position. Oh, and he got back in TLT just a couple week later. Gold - Keith was long gold since beginning of 2019 at least. Again, another 50% gain. Has he been shorting gold and gold miners? Yes at the top end of the risk range (which you know nothing about). Gold's high was back in August and is down almost 100 points since then. Oh and he's been long BTC since he made the call that the US Dollar was turning bearish in November. He's been long commodities, BTC, and short TLT since November. Nice try though!
    • RD
      R D.
      5 January 2021 @ 20:44
      @Thomas E., are you a Hedgeye troll on Real Vision? I hope so. Otherwise, your comments on this forum border on criminally incompetent.
    • PB
      Paolo B.
      5 January 2021 @ 21:16
      They make trade calls based on macro, and not look at price action. Any decent trader knows that you can't trade based on macro alone, it is a background to read the economy and the context. I followed them for some time and I sadly have to say that the track record is poor at best in my view. Maybe the calls have some logic but the timing is random. Having said that and as an example, they shorted gold and it went up but I think they will be proven right and we have one more leg down in gold. But shorting it a couple of weeks back makes zero sense, timing in trading is everything.
    • TE
      Thomas E.
      7 January 2021 @ 16:52
      @Paolo - they have the risk ranges which are based on price, volume, and volatility. If you're bullish you buy SOME at the bottom of the range and sell some at the top. The opposite if bearish. You don't go all in at once which is a lesson I had to learn the hard way. @ R D - you seem to be the troll on here. And you know I'm correct. Hedgeye time stamps all their calls. Just because it didn't work for you doesn't mean it doesn't work for others. I was very happy riding long duration and gold for all of 2019 (like Hedgeye recommended). I was also thankful for Keith's call in February to get out BEFORE the March crash. Does he make mistakes? Absolutely but he owns those mistakes. Is their process perfect? Absolutely not but I haven't found anything better available to retail investors. Oh and he called Quad 4 in Q4 2018 (yet another good call). People like you want 1 or 2 things to focus on. It doesn't work that way. You have to be flexible. If Hedgeye calls Quad 4 but a few week later (after more data comes in) they switch to Quad 3 you have to be flexible and make that pivot. If you don't that's on you not on them! Take some responsibility for your portfolio and don't expect someone else to do it for you. Take the information and make your own decisions. Like I said I've had really good results using the Hedgeye process and I'm getting better the longer I tune in and learn more.
  • SW
    Steven W.
    7 January 2021 @ 05:11
    Without constant new, novice investors Hedgeye would dry up and blow away
    • TE
      Thomas E.
      7 January 2021 @ 16:07
      Right...novice investors like the institutions that pay them for their research.
  • AT
    Alun T.
    6 January 2021 @ 10:27
    Usually enjoy reading the comments section after videos to pick up on nuances I missed in the talk. Everything below is all bullshit; hit the back button now and look to the next video, you'll learn nothing by scrolling down. Real Vision customer commentary starting to resemble Twitter IMHO.
    • HS
      Henry S.
      6 January 2021 @ 20:37
      This only really happens on videos that feature Hedgeye guests. For the most part RV viewer comments are generally informative and interesting.
  • OM
    Oliver M.
    5 January 2021 @ 20:42
    I am a hedgeeye sub. for some time now. But also listening to Raouls longer term Macro views. People often see the approaches as either/or. I think they can be applied in tandem. Great interview from Ed and Darius, good overview of 2021, especially as it also contained Darius personal views! 👍
    • JL
      James L.
      6 January 2021 @ 06:54
      Completely agree. Hedgeye really helps at timing and catalysts for big macro events. We may get deflation and get to go long bonds again, but from a higher price on the US10Y!
    • Dv
      Daniel v.
      6 January 2021 @ 12:55
      I have been a Hedgeye subscriber for 6yrs. Stopped my membership after they claimed they say March 20' coming... Never made me any serious money. At the best, you keep up with the stock market. But then you have to undergo the stress of all the flipping positions and listening to Keith's rants and making fun of his subscribers (newbee's, tryler, etc). Total disrespect for everybody.
  • DA
    David A.
    6 January 2021 @ 12:51
    To those people who have posted glowing comments about this interview, make sure you also watch Lyn Alden. She makes similar points, but more clearly, and backs them up with facts and evidence.
  • MD
    Mark D.
    6 January 2021 @ 07:03
    When the Quadzilla speaks, best to listen! Well done Darius.
  • pp
    peng p.
    6 January 2021 @ 02:12
    they change their pitch too much, seems more like a noise than a signal. I regret subscribing to hedgeye, you cannot tell or judge the quality of their idea, except their enthusiasm
  • JN
    Jerrick N.
    6 January 2021 @ 01:35
    Two real pros at work here. Happy subscriber to hedgeye and real vision
  • IV
    Ian V.
    5 January 2021 @ 22:58
    Darius conveys where we are really clearly especially what is unique to now and what is not, the substance of the moment. Very helpful.
  • DS
    David S.
    5 January 2021 @ 22:43
    Well done. It would be nice to see Mr. Dale quarterly, or after any quadrant change. Thanks. DLS
  • FS
    Filo S.
    5 January 2021 @ 07:55
    Thank you for bringing Darius Dale on your show. I believe he is one of the best, if not the best, macro strategists/analysts in the world. He and Keith have built a robust data platform and their mkt timing of the four key economic cycles has been spot on. Get the cycles right ahead of time, position accordingly and prosper. Between the Real Vision and Hedgeye Investment research platforms, I have everything I need. Thank you!!! Filo
    • CT
      Chris T.
      5 January 2021 @ 12:57
      not sure if serious.
    • TE
      Thomas E.
      5 January 2021 @ 16:20
      Agreed Filo.
    • RM
      Robert M.
      5 January 2021 @ 18:47
      Nobody and I mean nobody gets it all right in the markets. Companies like Hedgeye (and all the newsletter writers) are good at promoting their correct calls and not their misses. All about the marketing and signing up subscribers. Personally for me, the whole quad thing doesn't work as it is too short term in its structure.
    • TE
      Thomas E.
      5 January 2021 @ 19:37
      @ Robert M - you clearly haven't subscribed to Hedgeye or you just did the short term free trial they offer sometimes. Keith states plenty of times that he's not perfect. He talks about calls he missed often. He's not trying to be perfectly time the market but to be good enough to help investors catch most of the upside but almost avoid most of the downside. Key word "most" not "all."
    • AA
      Andrew A.
      5 January 2021 @ 21:52
      How much did they pay you to say that? xD
  • LS
    Lemony S.
    5 January 2021 @ 16:29
    Didn't McCullough just repackage the work of an earlier economist regarding the axes of growth and inflation/deflation - and call them "quads" instread?
    • pt
      popejumpingjohnpaul t.
      5 January 2021 @ 21:17
      who cares, its obviously bullshit.
  • AP
    Adam P.
    5 January 2021 @ 16:15
    I counted 27 "the reality is".
    • TE
      Thomas E.
      5 January 2021 @ 17:10
      Adam...perhaps we should record you talking and point out all of your repetitive tendencies.
    • AP
      Adam P.
      5 January 2021 @ 18:51
      If you did that I could fix it, Thomas E. I thought we could all improve, but it’s guess some of us are perfect... ahem.
    • TE
      Thomas E.
      5 January 2021 @ 19:33
      I guess that's the difference between you and me. I choose to focus on fixing things that have a much bigger payoff. You choose to focus on fixing things like a word used to often or a phrase used to often. While speech matters it doesn't matter nearly as much as learning a new skill or learning a new perspective which you clearly didn't since you focused on how many times Darius said "the reality is." Don't miss the forest through the trees.
    • RD
      R D.
      5 January 2021 @ 20:49
      @Adam P, I suspect "Thomas E." is either a Hedgeye troll or (even more embarassing) someone who actually drinks the Hedgeye Kool-Aid.
  • SF
    Stuart F.
    5 January 2021 @ 19:18
    #HedgeyeNation
  • WS
    William S.
    5 January 2021 @ 18:01
    much prefer listening to...Darius vs his boss
  • WS
    William S.
    5 January 2021 @ 18:01
    Great interview - much listening to Darius than his boss.
  • MB
    Matthias B.
    5 January 2021 @ 17:15
    the FED tightening? I wish they had the balls to do so but miserably failed in the past because that would imply to take away the punch bowl from WallSt., they are too afraid to do so...so many times proven especially since Bernanke took over
  • sg
    scott g.
    5 January 2021 @ 16:42
    so good
  • BK
    Binyam K.
    5 January 2021 @ 16:27
    Thanks Ed & Darius!
  • MT
    MARK T.
    5 January 2021 @ 15:31
    Fantastic interview. One of my favorite RV guests.
  • DD
    David D.
    5 January 2021 @ 12:35
    thanks for this
  • GP
    Gregory P.
    5 January 2021 @ 11:46
    Exceptional