Important that inflation and currency debasement is exactly what the Fed WANTS.

You're clearly not a Hedgeye subscriber or if you are, you have next to no understanding of how their process works.

Keep in mind they (Hedgeye) have been long dollars, treasuries, and gold since Oct 2018. Care to know the returns those assets have generated. Plus if you'd had got out of stocks in January when they called the deep Quad 4 and again invested in Gold, Treasuries, and Dollars your portfolio is looking really nice right now (which is why my and my wife's 401(k) is positive YTD unlike the S&P). You are picking a 2 month window and basing performance on that? Let's see what happens from now until early next year (2nd wave corona virus, election risk, more defaults, trade wars, etc).

You are absolutely right Tokyo T. Hedgeye is an awful company, I have subscribed to their services for more than 5/6 years, but couldn't stand it anymore. They are very offensive towards to whole industry, calling everybody names. Even their paying subscribers are laughed at by Keith McCullough, he does that openly in their Macro Show. I think that some day Darius will leave the company, he has a lot of potential and is a genuine guy. That's why I like Raoul and the guys from RV. There are very humble and open minded.

I find some of Raouls “pontificating” offensive but he is infinitely more intelligent than I. Keith is obnoxious sometimes but the guy has made me money. I understand the friction that people feel that is OK but I don’t have to like these people I pay them for a service.

Of course, you pay them to make money but in those 5/6 years I haven't made more money with them than I would have using any diversified portfolio. For me, it's just not worth the hassle, daytrading and being blocked and called a newbie or try'ler.

I ca appreciate that Keith is not everybody's cup of tea. I've been a subscriber to the Hedgeye Macro Show and Risk Range products for about the last 18 months. Two facts here: 1. They called the recent crash almost perfectly. 2. They've played the bull markets in both Gold and Treasuries almost perfectly so far, since November 2018. 3. Keith had an incredible run playing the short side in March and April. I notice people have been quick to put the boot in on Twitter over the last couple of weeks when he's had a shitty run on the short side, but Keith has not tried to disguise that. Not directly afiliated to Hedgeye, so when I say the above and the following as a Gen Xer, it's 100% my opinion. Keith can be abrasive and will put the boot into subscribers who ask what he believes to be asinine questions. Seriously though, some people need to harden up and take it with a thicker skin rather than getting all precious about being offended. Will help you deal with life when it throws its many turds at you. Just a thought.

He literally said early April that you would have to be mad for buying the market now and kept shorting it aggressively, resulting in big losses. Compare that with his small 1% and 2% gains, you need a lot of them now to make up the losses. Next to that, most of their subscribers can not short all these stocks because of margin restrictions, so you would have to use options. Try making money on a 1-2% move with options and compare it with the results you make on those big losses. Been there, done that. No more Hedgeye for me.

Yeah, they did not called the March bottom as a feasting opportunity. The quad process would have got you on the right side of the moves in Gold and Gold Miners though, not to mention Bitcoin and Treasuries. I'd also note that with the VIX rising, there is absolutely no guarantee that the March low was THE Bottom. Personally, I'm happy to pay for a process that prioritises risk management over FOMO. I'd also note now that with StoolePresident and his army of followers buying up almost anything that moves, there's a lot of emotional money now in this Market that will panic easily when something goes wrong.

I agree. And if this process works for you, great!

@Danieel V time is important. If you subscribed in 2018 you haven’t had to worry about the stock market because you have large gains in gold/bonds. Timing as Darius said is important. If someone subbed after the attention in March it was probably because their stocks were down -30% and were therefore trying to make it back. Key take away Keith is abrasive and you don’t like that, OK don’t sub to the macroshow and just follow the calls. Like Raoul with “buy bonds wear diamonds” same with Keith bonds and gold, I had zero exposure to equities and most Long term subs had small exposure. Each to their own. Good luck out there chaps.

I can't agree more with you Tokyo. Didn't know the lack of alpha on the backtesting. I'm not surprised at all! In other videos from Hedgeye, I specifically asked about this. You are absolutely right in calling BS when it's BS. Tired of guys calling tops and bottoms when in fact they have miserably failed to call anything ... and then sell it to the naïve !

I'm a paying subscriber of Hedgeye. I plan to renew. They have a process which has worked well in the past, up until the most recent few months. This is inevitable for a company that publishes trades. It is a tough game. You're going to have bad months and quarters.

Hey Stewart B, it's not even not worked for the last few months. It's more like the last couple of weeks, and not all aspects of it have failed; only really Keith's short trades in Real Time Alerts.

Sorry guys, maybe this is just me but I just don't get it. I have had my own business for 25+yrs, I have had periods where I could not pay my staff, no money for my family. But I worked through it and it worked out. Why in this fucking world would I let a somebody called Keith McCullough call me a newby and try'ler. Even if I he would make me a standard 20% per year (which he is off by around 70%), why would I let anybody call me names and laugh at me. Maybe it's me, I will never accept it, I have my pride.

Hedgeye's real time alerts dumped into an excel spreadsheet fails to beat S&P500 over long periods - in other words ones gets lower returns with lower vol

Muhammad A, what were the volatility of those returns though, and over what kind of long periods? Can you be more specific. Personally, I'd hate to be suffering a massive drawdown with the S&P500 if I suddenly found I desperately needed the cash that I no longer had because of the drawdown. Strangely enough, big market drawdowns tend to occur during recessions, when most people are more likely to have personal liquidity issues and need to get their hands on cash. It is all well and good to state the mantra that market returns are superior for those with the intestinal fortitude to be able to hold through the drawdowns and volatility, but many people do not have this kind of discipline/pain tolerance, and many more they suddenly find themselves facing a personal cash crunch during a big drawdown; thereby becoming forced sellers at the lows. Everybody is a long term investor in a raging bull market - not so much once they've had their teeth kicked in by a rampaging bear market. Just a thought...

They’ve made me money.

Tokyo sound like either a disgruntled employee or a competitor. I have been a Hedgeye sub for more than 12 months and while there are definitively issues, you cannot fault their market timing, or in fact, their overall understanding of what makes markets tick. People should be careful before buying a full Hedgeye sub, that is for sure (I followed them for 12 months before committing), because there is a bit of assumed knowledge & risk ranges can be improved. However, the comments I see from Tokyo & Daniel v should be viewed with some serious suspicion.

Hedgeye sub here! Agree with Tokyo T. What I don't like about Keith and his Macro Show bravada: when his trade is up 1% he usually makes tons of money, since he of course bought two-weeks-out options. But when his trade loses 1%, it's usually "nah, just 1% on a small tiny bit of capital, never mind". Miraculously, no options this time. Even though, I do not follow his signals, I still appreciate his speeches on navigating FOMOs, cawbells, fading emotions, etc. For people in doubt, you have to realize that his business is to sell subscriptions, so adjust your expectations accordingly.

How long did you subscribe to ETF Pro?

You want to manage VIX between 20-80 using a $40 a month product (ETF Pro)? Come on.

True, on RTA it is very hard to get into the trade and out of the trade when they do, even with their new app. However, risk ranges and investing ideas are well worth it. It is irritating however when Keith changes course in the middle of the trading day then tells you later and says see I told you so. Also true, that I was itching to by energy stocks when they totally tanked, but hedgeye predicted they would go even lower, which they did not do, and missed out on a very good rally.

It's crazy that you want people to nail everything right everytime. If you subscribed since 2017-2018 you will not say this.

Super interview, two top minds at work.

When Keith's short term macro views start to align with Raoul's longer term ones, I've learned it is wise to REALLY pay attention.

good advice. Yeah It seems like both are very good at what they do but have very different processes. So I can imagine getting some confluence of trading ideas between both means there is a good chance of it playing out big time.

Why would gold stocks go down if gold is going up?

John M, because they're equities and not Gold, and therefore don't always behave the same way - as those of us who held onto them during the March lows can testify from first hand experience.

It’s interesting because Raoul quotes Homestake Mining doing very well historically, (despite the market falling around it) however Rick Rule, my go to gold guy, when asked specifically, agrees that when stock markets sell off, so too do gold equities. However that said, the well managed ones recover much faster, as they have massively increasing cash flow, leveraged to the gold price, (and in many cases no debt) These fundamentals will make them top performers.

Gold equities are high beta and gold did go down rapidly for a brief period of time which caused the miners to get cut in half. Cross asset class (treasury and gold) volatility was the leading indicator for that. I held them from 12/2018 and then sold them all almost at the top days before they crashed but didn’t have the stomach to buy them back at the bottom. Won't make that mistake again... IF the opportunity even presents itself again.

Not sure why my earlier response in this thread got down votes for just stating a fact. I've held Gold equities since 2010 in varying position sizes- through both the pleasure and the pain. It is a fact that Gold equities do not always track the Gold price. Anybody who clings to the belief that they MUST do so "because it's logical" is either inexperienced, naive, or religiously wedded to their Gold stocks along with their Gold (a very dangerous thing to do; been there, done it, got the "I blindly trusted and invested in Peter Schiff's opinions because he was right in 2008" T-Shirt). Be open to the fact that Markets work in ways that are not always logical - particularly equity markets!

If there will be one more opportunity and I believe so gold stocks will be crushed and bounce back fast! If not? Well, in that case I have a few excellent base metal miners and other retail stocks. I buy when I am going to see a very tempting valuation!

Keeping quads in mind of course!

Hedgeye subscription would help with that drawdown. Have you seen Christopher Coles Dragon portfolio? He adds a fifth component Volatility

@JenniferM Yes I have seen Christopher Coles dragon portfolio. Its indeed interesting. I have found no easy way to replicate the long volatility and commodity trends part as a retail investor. I am too small to be a accredited investor :)

For retail access to volatility trading strategies, there's a CEIC listed in the UK called BH Macro that is actually a wrapper to the Brevan Howard Hedge Fund; one strategy of which incorporates Volatility Trading. They've had a good crash and post-crash period. There are listings in GBP, EUR and USD. From memory, the ticker for the USD listing is BHMU, although please check this.

You might want to up gold to 50% at the expense of long bonds We are at the end of long term debt cycle once in 80-100 years event Bonds have low yield anyway and we are in the process of currency debasement No to st that you will not make money in bonds next year but for next 10 years you should get out of bonds This is not regular times it is very important to understand it

@Alexander R. The entire premise of the permanent portfolio is based on the accepting the fact that I as a investor don't know anything about the dynamic macro economic changing environment. Thus I carry ingredients for all seasons even some of that ingredient are painful to hold. Long bonds does work great in a deflationary environment like this. The long term bonds are the main ingredients the safeguards the portfolio in the deflationary environment due to the role of bond convexity. By moving out of long term bonds, we are saying that our portfolio is not going to experience any deflationary pressure in the future. More info on the bond convexity and how it plays a important role in this current environment of low rates. https://portfoliocharts.com/2019/05/27/high-profits-at-low-rates-the-benefits-of-bond-convexity/

So I totally understand the utility of the long term bonds, it is been major part of "all weather portfolio " by Ray Dalio and anyone who bought into long term bonds years ago made equity like returns The problem is now world has to much debt, and it is in Central Bank DNA not to reapet 1929, so they will print and print and print Now a short period of deflation is still possible with real yeld actually in positive territory and bonds will do fine Now if you think beyond 2020-2022 think what stagflation will do to long term bonds ? Maybe yield curve control by Fed might give you a way out with limited loses, maybe ? My take you hide in gold/silver Let them inflate out of debt ( not advocating for money printing , just stating the obvious) and than in a few years get back into bonds, once they offer better risk reward

Alexander R, I would personally endorse hiding in Gold, but certainly not in Silver. The latter is a speculative asset for trading only IMO; not long term ownership. I'm with IKN Mark here: https://incakolanews.blogspot.com/2020/06/silver-vs-gold-one-chart-makes-current.html I notice some of Silver's semi-religious Internet newsletter sales force - highly active on the web in 2011/2012 - are now starting to spring back into life. Take this as a warning - not a long term investment opportunity. Silver is a trade, not a long term investment; unless you're into investment sado-masochism. I say this as a holder of a large amount of Silver bullion coins purchased predominantly in 2010 during the run-up to $50 in 2011, and then in 2012 during what I hadn't realised was the process of a Silver bust at the time. Don't make my mistake. Learn from it. By all means, trade Silver. I would just caution against owning it long term - its price has a history of round-tripping...

I actually find Keith's abrasiveness refreshing

I am on the other side of Gregory on this one. I enjoyed Keith's interview on RV. But his shtick on Hedgeye wears me out and it is why I am not a subscriber. Appreciate that some people like that approach but too Cramer like for me.

I think much of the reason we enjoy analysis from Darius more than Keith is because he looks further ahead and has a narrative. Keith mainly focuses on math and super short time frames which can be boring and repetitive and somewhat difficult to grasp sometimes. Overall I think they complement each other well.

I like when he pretends he does not want or need retail clients and their dumb questions!

As a HE sub as well, I believe he is referring to the recurrent bailouts for the (top) 1% as a form of socialism.

When did Darius say the US was in Quad 1? Was that on one of the Call segments?

I've had some of the same feelings. I think part of the problem is that they have so many different research offerings and unless you get them all it is tough to follow all the thought patterns. I don't subscribe to the institutional level and supposedly they discussed it on the call (which I do subscribe to) but I don't remember it ever coming up. I love what they do and they helped me save a lot of money over the last few years but it seems like they really missed a great tradable rally over the last few weeks. If we go to new lows it wont matter but I've got $6+ trillion reasons that isn't likely. But what do I know?

Henry S., new subscriber to HE since the Raoul and Keith conversation late March. I'm a bit irritated as well given the recent swift shifts/inconsistencies and generically incorrect overall view recently on some big calls. (It doesn't help when Darius and Keith are stumbling recently between everything from Quad 1 to 2 to 3 near term -- any "monkey" knows that.) But I'm defending them and their analysis, I think. Sure, I want them to clarify, so please do Darius and/or Keith. But the models overall are Rate of Change. The near term Risk Ranges are recent trends. In the last couple months, the Hedgeye RoC models on growth and inflation have flipped on a short term basis more than once due to giant swings in data (I presume), so their typical (ideal) smooth-ish sine wave is abnormal from a bigger picture cycle. At least that is my take. I think that is what constitutes the discrepancy. This isn't a normal cycle (in "smoothness"), and I presume a mini-cycle within the bigger cycle would present contrary indicators on a short term basis. I'm just typing out loud, but given the rapid change of demise, rebound, temp. data, etc., I'm just assuming the abnormal and inconsistent data sets explain the confusion. No excuses from my end, as it sucks and is confusing, but everything from the jobs data (which was recognized and admitted as incorrect) points to the inconsistency of reliability on RoC basis. So I'm giving the benefit the doubt, even though I agree wholeheartedly with your point. Every data point is anomalous over any charting period at present, so I think that adds to the confusion as everything RoC may purport to be positive but is still now worse than anything ever seen in history, other than the last couple months. Confusing in any model. I'm just guessing that is the discrepancy with HE. But totally agree, they should clarify as it seems necessary. For something in their model, should be clarified, even if needed to be changed more often in current circumstances. My two cents.

Darius cleared this up on twitter. It was simply conflicting signals which rarely happens and KM's are usually correct anyway. Keith sticks with the big sine curve so as to not confuse people too. Based on the Q in The Macro Show you can tell a lot of people are scared cause they chased a move and don't take the time to learn things on their own. Although his style of shorting super fast for tiny gains on the bounce doesn't make sense me.. way too hard for most to pull off. Its just takes some time to learn how to incorporate their process into a trading style you’re comfortable with. No process is perfect unfortunately, but theirs is damn consistent.

I might posit that oil is more inversely correlated to the dollar and gold is more inversely correlated to real rates(?) Also the 70s is a tough comp to today I think in that the macro environment is so very different (globalization) just my two cents though

The most common quad 3 scenarios aren’t accompanied by such massive destruction of growth. The varying rates of change of growth and inflation make for nuances in asset allocation. These are rather unusual market conditions.

Good point. Unfortunately All anyone, includingDarius and Ed, can do is speculate about the impact of policy. Seems reasonable to assume not much on the fiscal side, although I think it more likely that Trump give the Dems what they want in exchange for they give him what he wants, and the Fed monetizes the cost. Maybe time to have Jeff Snider back on RealVision as today’s interview on MacroVoices he questioned whether the reflation pump by Powell was not working. Darius questioned whether YCC could work in the US, and Snider’s analysis is that QE is not increasing money, only bank reserves. Corporate borrowing is not financing growth projects, but only increasing balance sheet liquidity, more of a deflationary sign.

Second for an August interview

Slides are included in the PDF version of the transcript which is available for download on your computer.

Use a capture program like FastStone Capture, pause the video and capture the image. Then you can keep it up while you continue to watch. Also has the advantage you can zoom the slide to be able to read it more easily.

Thanks Max - this is great! (thanks Roger too!)

I was thinking the same thing!

Anybody can look like a genius in an uptrend. Days like today will be a test of their character and intestinal fortitude though. On this note, fighting talk from Davey here: https://mobile.twitter.com/stoolpresidente/status/1271076533151715329

“For good” is a hell of a long time, I think he probably meant for this cycle.

cycle is already over as we got into recession... what i dont understand is, whats the driver this time for jobs not to come back as quickly as they left? i get that its not going to be globally synchronized but as soon as economies re-open you should theoretically re-hire every fired worker UNLESS, you see deep disruptions in the economy caused by change of practices and behavior from economic agents. (and i m not talking abt the compagnies which were operating with 105 workers instead of 100 because job market was tight so they were afraid of firing ppl and have some who would leave and be then understaffed)

Many small businesses, especially those in the hardest-hit sectors and geographies, will not be able to profitably re-open, and will close for good. They don't have enough cash flow to survive a 3-4 month shutdown

if they close "only" because they didnt have enough cash or lets say they were to leveraged. Then other businesses will replace them as i dont see banks or other financing channels requesting businesses to have enough cash to survive pandemic.