A New Model to Manage Macro Risk

Published on
January 25th, 2019
Duration
59 minutes

A New Model to Manage Macro Risk

The Interview ·
Featuring Keith McCullough

Published on: January 25th, 2019 • Duration: 59 minutes

In his inaugural appearance on Real Vision, Keith McCullough, founder and CEO of Hedgeye, explains why now is the time to pay special attention to macro risk. In his opinion, factor-based index investing and the growth of market-neutral hedge fund strategies have made financial markets more sensitive to macro risks than ever before. With growth slowing globally and volatility rising, investors need to find ways to marry bottoms-up analysis with top-down risk assessments in one holistic approach. Keith speaks specifically to fixed income, currency, and industry sector strategies. He and Raoul also discuss the issues with the mainstream financial media landscape. Filmed on January 14, 2019 in New York.

Comments

  • PP
    Peter P.
    28 February 2019 @ 14:39
    I greatly enjoyed this interview, but wanted to re-visit the GDP call....Maybe it was the shutdown, and I know GDP is perhaps the most revised number of all....but Q4 GDP just printed 2.6% (which is where Atlanta GDP Now was when the interview posted) vs a 1.56% that Hedgeye was forecasting.....and the Q4 PCE was 0.1% from expectations and printed 1.8% (now if inflation is really running 1% higher than Hedgeye is spot on & GDP is lower) - any thoughts or feedback would be welcome, and again loved the interview
  • JS
    Jabali S.
    12 February 2019 @ 10:33
    Im pretty sure its an amazing interview!! i just have to watch it again for the 3rd time to understand it a lill bit more :-( . But over all , thank god for RV, Raoul Pal and Grant Williams, this is true education.
    • Kv
      Kristian v.
      13 April 2019 @ 02:10
      If you really want to get it head over to Hedgeye and sign up. They’ll give you a free month of the macro show after about a week or so. Watch that every morning for the month and it’ll get real clear.
  • JS
    Jabali S.
    12 February 2019 @ 10:33
    Im pretty sure its an amazing interview!! i just have to watch it again for the 3rd time to understand it a lill bit more :-( . But over all , thank god for RV, Raoul Pal and Grant Williams, this is true education.
  • oo
    olga o.
    11 February 2019 @ 19:24
    Excellent!!!
  • TH
    Truman H.
    11 February 2019 @ 00:57
    "You don't need recession to lose half your money" -- well said!
  • RA
    Robert A.
    1 February 2019 @ 23:35
    Just an excellent interview and I won’t even continue to detail further praise as there are so many great comments posted by my fellow RV’ers! Ok...here’s my Agora story; 35 years ago I put some money with a Newsletter writer that I had read for five years. He made me 5%/year (net 3% to me after his 2% annual fee) for 5 1/2 years while the S & P went up approx 15%/year during that time—I would probably have continued with him for another few years hoping that his record improved (did I say I really liked his writing style?) except for....wait for it.....I got an unsolicited advertisement recommending his investment services touting the fact that he had made 30% annual returns over the past several years....knowing that I had received his quarterly statements and tax reporting information for my 5%-2%=3% returns I met with him and fired him. I learned that he had sold out to Agora and that Agora had sent the mailings exaggerating his returns unknowingly to me, an existing client of his. Never wanted to go to Baltimore anymore.
  • LT
    Lucas T.
    31 January 2019 @ 16:21
    I would love a series of interviews where you just dig into this guy's mind about all the relationships among assets lurking in there. Just really dig into his process. This interview was two guys shooting the shit, with interesting things hinted at.
  • TW
    Thomas W.
    30 January 2019 @ 17:04
    Superb.
  • NI
    Nate I.
    30 January 2019 @ 06:23
    One of your best interviews Raoul. Well done. I'm also a Hedgeye subscriber and I think they have a great product. I would recommend Keith's work to anyone. You didn't touch on it in the interview, but it has been very helpful to me to start each day at 7 am with coach Keith on the macro show and get my head in the game. All great players need a coach and Keith is superb in that regard. I hope Keith is there with me on the macro show for decades to come.
  • KG
    Kirk G.
    30 January 2019 @ 05:28
    Keith is excellent, top drawer research at hedgeye
  • DD
    Darios D.
    29 January 2019 @ 19:40
    This is absolutely amazing - thanks for the great Interview!
  • gg
    georgy g.
    29 January 2019 @ 10:51
    It is interesting. Could be a good idea to let ppl send qs prior to some talks. Two things were missing for me: value in the mkt as defined by fcf yield/growth at different points ( real money buys valuations in the contact of macro) and fwd look, for instance trade deal will mean growth momentum starts improving and comps easy at the end of 2019. Historically mkt can look fwd 6 months
  • AP
    Anthony P.
    29 January 2019 @ 05:20
    Excellent choice of guest. Good interview as well. I look forward to a day when "new wall" media is the norm.
  • JL
    Jim L.
    29 January 2019 @ 02:24
    Great work Keith. I have always appreciated your process and transparency
  • RE
    Richard E. | Contributor
    28 January 2019 @ 19:02
    Not to be a pain, but it is 'bottom-up' not 'bottoms-up' when referring to fundamental investing. Please reserve 'bottoms-up' for drinks after work.
    • RE
      Richard E. | Contributor
      28 January 2019 @ 20:13
      Sorry, but didn't want that to be my only comment. This was a good discussion and I echo the kudos to RV for being willing to air the views of a heretofore competitor. I would also strongly echo what Keith says in the interview about 'process' vs. the 'trade idea or view'. Often, I will watch what I think is a great discussion on RV and then read the comments and see people say 'yeah but what is the trade?' Forget about the 'trade'. Learn about how to hone your process from people who have already paid that education expense to the markets. For what it is worth, Keith's process is remarkably similar to the Investment Clock that I believe Merrill Lynch debuted back in the early 00's. If you Google it, you can find it.
  • NG
    Nick G.
    28 January 2019 @ 11:25
    OK, I can buy it. Rate of change is important. Great. Now show me the performance figures. Even if pro forma. Everything else is a marketing love in. Funnily enough on Hedgeye website I can find not a single number. Am I mistaken? And if not: why?
    • MT
      Mike T.
      28 January 2019 @ 12:53
      Ask for a free trail and all will be revealed. Every call that KM has made is archived and 'timestamped'. Even if you don't like the 'calls' you will learn something if you stick with it for at least a few weeks. Even with Hedgeyes excellent track record it's not an effort free zone, to get the most out of their methodology you have to be prepared to be in the work yourself to fully comprehend
    • LC
      Louis C.
      28 January 2019 @ 13:48
      very good points. If I was as confident as he is about his model, I would trade it, not sell research. But it must be less stressful to sell his research rather than to trade his own research (maybe he is doing it, with a significant amount of his own money, and in this case total respect to him). Put your money where your mouth is. Not surprising, I find Realvision most interesting interviews to be trader ones: Marc Cohodes, Mark Hart, Druckenmiller, Peter Brandt,... they have nothing to share (sell) but their trading experience and how humble it makes them.
    • MT
      Mike T.
      28 January 2019 @ 13:53
      Within the suite of products under the All Access, there is specifically RT Alerts where KM trades his own money in his personal brokerage account. All visible and archived for subs. to view anytime even for free trial accounts
    • NG
      Nick G.
      28 January 2019 @ 14:29
      Mike, any chance you can share a link...because I am obviously too stupid to find it.
    • MT
      Mike T.
      28 January 2019 @ 15:02
      Nick, try this for info.... https://accounts.hedgeye.com/profile/subscriptions and the next one to ask for a free trial https://app.hedgeye.com/contact . If you fancy grovelling -:) :-) try giving them a call on + 1-203-562-6500. I know of many folks that have got a month freebie as first time of asking. Go to be worth a try. Plz note other than being a sub, I 've no relationship with anybody at Hedgeye I'm purely a paying client nothing more.
    • NG
      Nick G.
      28 January 2019 @ 17:00
      Thanks Mike. Why people would hide good performance behind a paywall is beyond me. All the words in the world would not persuade me, while a single number would. I will go have a look-see.
    • MM
      Michael M.
      29 January 2019 @ 21:09
      You don't have to pay, definitely used to be able to download their entire performance onto excel without signing up. Perhaps now you need a free trial. I'm sure they would send you the spreadsheet if you asked. That's only one retail product mind. I find it very helpful and they have great winning streaks and research and are accountable.
    • DC
      D C.
      12 February 2019 @ 22:16
      Had used their products previously (5 yrs ago+)...and they had a mirror fund that closed up due to lack of performance or interest a few years ago. Yes, in the end, true true alpha performance in macro space is hard to find. But if anyone has their excel sheet and are a big fan, it would take 2 minutes to tell us what their unweighted CAGR is. Would bet dollars to donuts, it's gonna be pretty average or underwhelming.
  • KD
    Karl D.
    28 January 2019 @ 07:37
    That was a treat to watch!
  • HC
    Hugh C.
    28 January 2019 @ 00:34
    Great interview, could have listened for another hour.
  • PG
    Philippe G.
    28 January 2019 @ 00:00
    Excellent! Attention RV: Would love to see/read in-depth content on the intersection of data science and investing. Keith just briefly skimmed the surface on this
  • RB
    Robert B.
    27 January 2019 @ 19:35
    At last, a meeting between the best in global macro.
  • EN
    Eric N.
    27 January 2019 @ 17:36
    Not subscribed to macro insiders on RV, but this is what I'd imagine it to be. Thanks a lot for giving RVTV subs like myself access to it, it was very interesting!
  • JS
    John S.
    27 January 2019 @ 17:10
    Brilliant interview! As a long time subscriber of both RV and Hedgeye I admit the biggest recent error I've made was being pigheaded about Kieth's quad 1 bullish call in November 2016. I found his abrupt change of mind offensive but have since been able (for the most part) to eradicate personal bias and follow the data wherever it leads. Thanks primarily to Hedgeye, my clients are far more likely to achieve their objectives and I may actually survive my 4th decade in the business. Sunday 1/27/2019 10:00AM Hedgeye 565 Old Wall 19
  • JS
    J S.
    27 January 2019 @ 15:07
    Thanks both, great interview! I listened to Keith on Macrovoices in 2017 and 2018 and he absolutely nailed it both times.
  • TS
    Todd S.
    27 January 2019 @ 13:58
    Excellent interview ! So much value here in this discussion
  • MH
    Marco H.
    27 January 2019 @ 11:42
    If we get only one interview like this a month (or even quarter) I feel it is worth a subscription to RV. It is where both persons are at par although they might have a different area of strength or expertise.
  • RD
    Ravi D.
    27 January 2019 @ 11:23
    Firstly, I would like to say I've really enjoyed the interview - its humbling to hear when people talk about how they f'd up along the way and what they learnt from it. Imo, over the last couple of years RV has added value to my process, philosophy and style. I am in my 9th month in my PM career (lucky to be given the opportunity) in the UK small cap space and would like to say thank you to RV, and not because of the, 'new ideas', 'what will happen in the macro world', or 'how can RV help inflate my wallet', but to listen and read about opinions that continue to question my process, philosophy and style especially after the last 10 years of the bull run... My key takeaway to my PM career (which is what I always wanted to do since I graduated in 2008) is survive.. haha
    • RP
      Raoul P. | Founder
      27 January 2019 @ 14:15
      Wow. Thank you and best of luck!
  • MT
    Mike T.
    27 January 2019 @ 11:12
    I've been a Hedgeye subscriber for nearly three years, for an individual investor/trader I'm of the view there is no better place or service to spend money with. However a small word of caution for those unable to afford institutional level sub. (like me) an 'All Access' pass at $2k per year doesn't provide a personal service therefore to really appreciate Keith's work it took me 6 months of daily listening to his Macro Show, note taking and personal study of his entire content output to 'get it'.
    • MT
      Mike T.
      27 January 2019 @ 11:17
      One more comment if I may. Kudos to Raoul for putting this on as Kieth and Hedgeye is a prime competitor to his own fee based sevices
    • MM
      Michael M.
      29 January 2019 @ 21:12
      Agree they are competitors but also very complimentary and offer differ services.
    • SM
      Stuart M.
      30 January 2019 @ 00:03
      Yes, enjoy both - definitely complimentary as evidenced by several people in comments who are clearly subscribers to both!
  • AH
    Andreas H.
    27 January 2019 @ 11:00
    Best interview ever!!! Two Rebels improving the world. Love you guys & Thank you a ton!!! Best Regards Andreas
  • RM
    Ryan M.
    27 January 2019 @ 05:45
    This might just be my favourite interview on RV to date..Really fucking brilliant! I LOL'd hard at about 7mins to go when Keith took a shot at Josh Brown!!
    • RM
      Ryan M.
      27 January 2019 @ 05:51
      Also, mad respect for Raoul's restraint when Keith mentions Bridgewater LOL!!
    • MM
      Michael M.
      29 January 2019 @ 21:21
      noticed this also, after raoul called them a fraud on twitter not so long ago :). IDK they must be doing something right
  • DS
    David S.
    27 January 2019 @ 02:50
    I watched and enjoyed the interview twice. Models and humans are fallible however, and the future is unknown. Both Keith and Raoul explained this during the interview. The follow statement by Keith, therefore, was a little disturbing: “We've got that down now. That, I have a roadmap. The process is repeatable. It's literally impossible for me to have style /drift relative to that component of the model.” The first derivative of growth and inflation can be miscalculated. DLS
    • MT
      Mike T.
      27 January 2019 @ 11:22
      David, any chance you might be able to post a maths based example to illustrate and support your assertion, thxs.
    • DS
      David S.
      27 January 2019 @ 20:53
      Mike T. - Sorry, I am sure Keith will do the calculus correctly. The inputs defining the curves are always at risk. The data are not current and can be markedly revised. Politics can drive the market and your curve and you may be in the wrong quadrant. The main reason for my comment was, however, that Keith is definitely not a hubristic person, but this is a hubristic statement – “The process is repeatable. It's literally impossible for me to have style /drift relative to that component of the model”. Maybe I have seen too many Greek tragedies. This was just meant to be a heads-up. I should have been more specific. DLS
    • DS
      David S.
      28 January 2019 @ 02:29
      After reviewing the charts again, I see that it is a dot-plot of the YOY percentage point differences (bps) - nothing to do with calculus. I was confused by the term second derivative on the chart. It may still be predictive of future Fed behavior based on prior Fed behavior. Should the x-axis be CPI instead of CPL? DLS
  • AS
    Anant S.
    27 January 2019 @ 02:49
    absolutely brilliant chat. Thanks for putting this together.
  • SH
    Syed H.
    27 January 2019 @ 01:15
    This interview is embarrassing. I am embarrassed I thought of not renewing my subscription to RealVision. I'm embarrassed I didn't know Raoul and his partners started RealVision as a bonefide public service to investors & traders (and little fish like me) so we could have a better chance at keeping our hard earned money. What. An. Excellent. Interview. Sorry Raoul.
    • DS
      David S.
      27 January 2019 @ 03:06
      I do not understand your comment. If you thought this was an excellent interview, why were you considering not renewing? There are many motivations necessary to start a new enterprise. One reason for RVTV was to improve the investment understanding of people like you and me. An enterprise needs to be funded. RVTV set up a for-profit corporation as a means to fund the mission. This is classic entrepreneurship. I enjoy and have learned a lot from RVTV far beyond the investment horizon. I hope you continue your subscription and comments on interviews. Good Luck. DLS
    • NZ
      Nicholas Z.
      27 January 2019 @ 03:11
      I think he means that was fessing up to having thoughts about not renewing prior to watching the interview. The interview changed his mind
    • DS
      David S.
      27 January 2019 @ 03:30
      Nicholas Z. - Thanks. That clears it up. DLS
  • JB
    Jake B.
    26 January 2019 @ 22:28
    Great interview between two mavericks who genuinely care about the little guy. I feel very lucky to have found Hedgeye and Real Vision at this time in the cycle. Highly recommend both.
  • AG
    Adam G.
    26 January 2019 @ 20:38
    Great to see Keith on RV. I'm a charter RV member and have been following Kieth for quite a number of years. Always found Kieth to be transparent and continually refining his system with positive results. Both, in my opinion, constructively provide an honest service to the average guy. Glad to see you continue to keep your stick on the ice Kieth .. bravo! Yup, I'm an Ontario boy :-)
  • my
    markettaker y.
    26 January 2019 @ 20:26
    Love the call-out of the RWM folks. Definitely to be avoided.
  • my
    markettaker y.
    26 January 2019 @ 20:05
    @Milton: I think there's a mistake in the Four Quadrant model, 39:31. Bottom right is surely meant to be inflation ACCELERATING???
  • MP
    Mark P.
    26 January 2019 @ 16:11
    Who is the amoral “Billion dollar behemoth” that pumps out BS newsletters Raoul referred to?
    • my
      markettaker y.
      26 January 2019 @ 20:00
      came here wondering the exact same thing. Who are they? Let's name names, people. off the top of my head I guess he'd be referring to the Stansberry folk.
    • KD
      Kevin D.
      26 January 2019 @ 22:17
      Or more generally "Agora Publishing". They do offer some value, however they also offer any watered down nonsense that they think their marketing machine can peddle and make money with.
    • RP
      Raoul P. | Founder
      27 January 2019 @ 02:09
      Agora
    • JS
      John S.
      27 January 2019 @ 08:50
      Agora has turned Rickards into a snake oil salesman
    • MT
      Mike T.
      27 January 2019 @ 11:59
      How about the entire Elliot Wave newsletter industry?
  • ZH
    Zack H.
    26 January 2019 @ 15:14
    This was brilliant- In top 5 RV segments; Keith and Raoul 2 of the best in the game, changing the game,
  • DS
    David S.
    26 January 2019 @ 14:48
    FYI - there is an error within the slide outlining the quads. In quad 3 the slide states inflation decelerates but should be accelerates... had me scratching my head for a minute...
    • DS
      David S.
      28 January 2019 @ 02:06
      Should the x- axis be percentage point difference of the YOY Headline CPI not CPL? DLS
    • DS
      David S.
      30 January 2019 @ 00:32
      To avoid confusion, the current charts in the transcript shows Quad #3 as inflation accelerating as it should. DLS
  • SJ
    Sy J.
    26 January 2019 @ 14:18
    Does Real Vision have a dress code?
    • NC
      Nic C.
      26 January 2019 @ 18:37
      yes, casual - is that a problem for you?
    • SH
      Syed H.
      27 January 2019 @ 01:18
      Yes. Clothing optional.
    • RP
      Raoul P. | Founder
      27 January 2019 @ 02:11
      No. We don't care and nor should anyone else. That is a key part of RV.Although Keith wearing a suit was pushing our dress code a bit far...
    • SJ
      Sy J.
      27 January 2019 @ 03:21
      So much hostility to a simple question. Peace and love.
    • NC
      Nic C.
      27 January 2019 @ 19:29
      antagonistic and irrelevant question - nothing simple about it - as RP said "who cares"
    • CC
      Christopher C.
      27 January 2019 @ 23:28
      What can you discern about a person who chooses to judge the relative merit of the meaning, content, and context coming out of someone's mouth by first filtering that judgement through their relative value assigned to what the speaker is wearing? Is it different than the person that does not even choose to judge so but does so out of habit or convention?
  • JB
    Jack B.
    26 January 2019 @ 13:17
    certainly wouldn't get that coverage on cnbc! very good
  • MB
    Michael B.
    26 January 2019 @ 09:18
    I have no first hand experience of Hedgeye, but what concerns me about it is the same thing that concerns me about the popularity of Ray Dalio. Everyone is always trying to copy the previous huge success, and the more that becomes known and copied the less it will offer an edge. I'm not saying everyone in the entire investment world is following Hedgeye or Dalio type analysis, but on the Hedgeye website it mentions in bold writing that the institutional subscribers using the service manage around $10 trillion dollars. So my point is, if you have an edge, surely you erode it significantly by encouraging mass adoption? I imagine Felix Zulauf was right in his interview, which is one of my favourites on Real Vision. A lot of money is chasing the same sort of modeling, the same big data analytics, trying to become the next Dalio or Bridgewater, but the really big edge is probably going to move on somewhere else. Maybe back to maverick traders as Felix suggested, or something/someone none of us have heard of yet.
    • RP
      Ryan P.
      26 January 2019 @ 14:03
      Yes but to play devils advocate, if your stuff isn’t good or doesn’t work, people won’t use it and you go out of business. If someone is copying someone else chances are they know that and are trying to improve the process with their own original ideas. It’s like open source software or code. It’s made public so people can copy it and improve on it. I think your right in the fact where everyone using same risk modeling may crowd the same bets , IE quant shops. But I think there is something to be said with combing through data to find patterns that complement your own process and not blindly follow someone else’s cause it resembles a “dalio”
    • AD
      Axel D.
      26 January 2019 @ 23:49
      Question is how much money is on the other side, 50 trillions ? more?
    • MB
      Michael B.
      9 February 2019 @ 13:40
      As a quick follow up to my last post, I have taken a trial with Hedgeye. I still have concerns that the edge erodes if there is mass adoption of their products, but I have to say I really like what they do. I just hope it never becomes *too* popular. Real Vision and Hedgeye are a great combination. My thanks to both teams.
  • JA
    J A.
    26 January 2019 @ 05:12
    Gained a lot of insight and respect for Keith here, good discussion here.
  • IC
    Ibrahim C.
    26 January 2019 @ 04:35
    Although it is a brilliant interview, the main message except Quads’ analysis has been really short. Having understood that this interview is really macro based, I heard just few narratives on everything but not a clear cut trading view. I would expect more to see if the RV keeps him interviewed in other episodes.
    • MT
      Mike T.
      26 January 2019 @ 08:46
      Ask for a free trial and Hedgeye will probably agree
  • jd
    john d.
    26 January 2019 @ 04:00
    Thank you Keith and Raoul, first time can really feel that someone really cares enough about the average Joe, that and your segment on retirement crisis
  • JH
    Joel H.
    26 January 2019 @ 02:26
    Great! Thanks guys!
  • MR
    Mathew R.
    26 January 2019 @ 00:52
    Probably gonna have to watch this one twice
  • TC
    Trevor C.
    26 January 2019 @ 00:26
    Brilliant
  • VS
    Vasil S.
    25 January 2019 @ 23:50
    Superb stuff. One to watch again to ensure all the insight sinks in. Looking dapper Raoul. Nice jumper (lose the socks mind ;)).
    • MK
      Michael K.
      26 January 2019 @ 02:08
      Love Keith’s hair!
  • BM
    Beat M.
    25 January 2019 @ 23:32
    Keith can be ... mmmm ... canadian? What a positive surprise!
  • JF
    Jarrod F.
    25 January 2019 @ 23:09
    Hedge funds have never used more data than today, and their returns have never been worse.
  • DF
    Dominic F.
    25 January 2019 @ 22:16
    Great conversation !!! We could literally see you guys exploring each others minds on camera. That is why I like the visual video interview as opposed to an audio podcast. Brilliant exchange. BTW, my least favourite comment by 'Business News Channels' is when the in the business section of the nightly news the reporter says "Stocks were down today on profit taking" Hahahahahaha Wah?!?!?! Thanks RV for what Raoul was describing as Integrity and Responsibility in this space. Those two words need to be resuscitated :-)
  • MM
    Mike M.
    25 January 2019 @ 21:41
    Very good.......does Keith publish his Profit Factor quarterly?
    • MK
      Michael K.
      25 January 2019 @ 22:32
      not sure what a "profit factor" but subscribers have full insight into every action, trade, and view. and non subscribers get an incomplete glimpse.
  • FC
    Fractal C.
    25 January 2019 @ 20:15
    RVTV is fast becoming the CNBC.
  • JG
    John G.
    25 January 2019 @ 19:31
    I am a founding subscriber to Real Vision and a long-time subscriber to Hedgeye All Access. Because of that fact, I did not learn a lot from this conversation that I did not already know about Keith. That said, I really liked the honesty from both Keith and Raoul when describing their bad calls in the past. I also like that Keith, Raoul and their respective firms are on the same page of helping to educate investors to a better way of investing their savings so that they don't lose half of it in the next bear market, which I think has started. With the help of both firms, I have been able to improve my investment process to take advantage of the "Old Wall" way of thinking, (which I was part of as a RIA for many years).
  • SF
    Stuart F.
    25 January 2019 @ 18:55
    Absolutely fantastic!!!
  • MC
    Mike C.
    25 January 2019 @ 18:33
    Hey, what's Keith's record like?
    • AR
      Andrew R.
      25 January 2019 @ 18:41
      I’ve been a subscriber for about 29 quarters now. They had two major misses: bearish in summer of 2012 (flipped 1st week of Dec 2012), and after nailing the 2015/16 drawdown, stayed bearish too long (flipped Nov 2016). Other than that, they’ve been spot on about macro calls. (26/29 not bad!)
  • RP
    Reed P.
    25 January 2019 @ 18:15
    Holy cowbell, Matt Damon is smart!
  • CC
    Christopher C.
    25 January 2019 @ 17:01
    "I just thought, the smaller probability outcome is going to be the one that happens, which is dumb thing to do, betting on the smaller probability. But that is what I did and screwed it up." -- Raoul Pal <----- That statement hit me like freight train. It is pregnant with so much meaning. What is not said is how twisted the system has become, and that even a cursory glance at market history specifically, and human history in general will tell you what is not only inevitable, but what the scope of that inevitability will be. i.e. Raoul's "The End Game." What has happened to me time and time again is the breath taking scope of that "small probability" so impacts me psychologically and even emotionally, that the scope of the outcomes bleeds over into my perceived probability of the outcome and puts it thumb on the scale of my decision making. Inevitable exist to infinity. Imminent but for one brief moment in time.
    • MC
      Matt C.
      26 January 2019 @ 07:58
      That's a bummer man
    • CC
      Christopher C.
      28 January 2019 @ 10:44
      I used to feel more than a bit of despair over the whole thing as well. Charlie Munger had some wise words that helped me. Maybe they will help you as well. http://www.youtube.com/watch?v=Pph3Bg8Pihg&t=10m16s
  • JL
    Johnny L.
    25 January 2019 @ 16:33
    great interview
  • CS
    Charles S.
    25 January 2019 @ 15:56
    I always find it helpful when the video has breaks that show the various topics covered in the video. It helps with being able to go back and re-listen to things without having to navigate the entire video. Perhaps you could add that to this video? Great content. Thank you.
    • JW
      Joel W.
      27 January 2019 @ 22:14
      Charles, above the comments section there is a chapters section. Just click on the chapter to navigate to that part of the interview.
  • Av
    Ad v.
    25 January 2019 @ 15:54
    Made lots of $$$ thanks to both RV and Hedgeye in the last 3 years. Great to see these two in a conversation.
  • TJ
    Terry J.
    25 January 2019 @ 14:50
    This is another one of those videos from RV that is just totally absorbing. I feel privileged to be able to watch for a whole hour, two of the brightest macro analysts in the world discuss and debate how the markets interact, the key economic data factors to follow, and potentially what to expect from the major asset classes in different global scenarios. Awesome. I especially loved Keith's anecdote about the Fed economist, who did not recognise his own data! As I think Keith said, "You could not make it up!" Thank you RV.
  • MS
    Martin S.
    25 January 2019 @ 13:55
    Really, really good!
  • AP
    A P.
    25 January 2019 @ 12:55
    To Raoul and Keith, genuine question. You talk about rebellion, building a process and education. RV has unlocked the best minds of finance to give their views using their own process and distill them to a wider audience (today people interested in finance, potentially much wider tomorrow). This is Market Wizards in real time and beyond, so kudos. HedgeEye is apparently on top of the game with data analytics and their process. Great. (Long) Question: When is it that both of your companies will help people refine THEIR OWN process (hopefully data-driven and repeatable, maybe with some models)? Is it a specific series you are working on that will only focus on that and more in the format of courses? Watching videos to try to glean insights is all good, but for me the real goal of RV - which puts both PROCESS and EDUCATION high on its list of core values - should be to get the viewers to build their own process with much more step-by-step educational videos, and see how to incorporate new insights from guests to refine the process (an example here would be to say 1/ You can build your own quadrant doing ABC and 2/ To start with basic data analytics do ABC). Some viewers will think this is spoon-feeding, others would say “dream-on, this is proprietary”, others that doing data analytics for retail is not possible. But I suspect that getting down to the bottom and using first principles each time would be something so useful for the most of us (and this is why I would suggest to get the process-oriented insights somewhere). Maybe other viewers will respond to this comment by saying that their process is now so robust thanks to RV (others that it's not RV's role, in which case talking about "a platform that gives you tidbits of other people's process" would be more accurate) and in which case I would be interested in knowing how they did it.
    • RP
      Reinaldo P.
      25 January 2019 @ 14:27
      oh please! this is a media companny with top content on finance/investing due to the variety of insighfull conversations like this one. Different people with different points of view talking about their process. You want a piece of it, then you've got to pay. This is way better than a funnel view for only one thing, because from here you can built your own criteria taking what is relevant to your own journey. If you want to go a stetp forward then you should look for researchs suscriptions not TV's. In that case the Think Tank would be a very good starting point, 100%.
    • AP
      A P.
      25 January 2019 @ 15:00
      If you don’t ask, you don’t get. You only ask for media, you only get media. RV is a startup that just got some funding, so they can orient things the way they want based on what the audience is asking for and their Vision. Hence the (positioning) question: do you go down the deep process-oriented route which is probably more educational (which seems to be what RV wants to do/be & displace some MA in finance along the road) or just stick to media? I have been a LT subscriber here, hence my question. And I know others would like more educational (process-oriented) products, and I personally need to know if I can count on RV to help me build a robust process. The fact that RV is delivering LT quality interviews with guests is a long standing legacy and the core product, but as they start to talk more and more about process then I am asking how far down the process line will they go. The amazement with another interviews from Drunkenmiller will be less and less with time and I think that the next step is how RV will help shape the next Druckenmiller. Funny you bring RV Think Tank to the table because this is a great example: it was drastically decreasing in quality and because some voiced their concerns, now we get amazing products. And btw you still don’t build an investment process out of RV TT. I am subscribed to other outlets that are all about the process and can tell you there is a big demand for that.
    • DD
      David D.
      25 January 2019 @ 15:32
      It's fairly easy to copy the Hedgeye process tbh.. I've got a spreadsheet that has multiple inputs and measures rate of change (for growth and inflation); its probably not as complex (or robust) as Keith's but as they alluded to, it's better than what most economists are doing! Go to the FRED website, and start playing with the data. For Raul's process, start modeling ISM's.. Also, if you're looking for data check out Quandl. Good luck.
    • RP
      Raoul P. | Founder
      25 January 2019 @ 23:06
      While education is important it's tough to get right and would be an entire pivot as a business at this stage. We will offer more educational style content and will move towards some separate courses but we cant really alter course from a broader media company into full, deep, quality education as yet. We have too much of the basic blocking and tackling to get our business to where we want it first. But, as ever, I appreciate the thoughts and idea. This is one that gets debated a lot at strategy level within RV.
  • RP
    Reinaldo P.
    25 January 2019 @ 12:05
    I had been waiting for Keith on RV. Thx!!
  • AP
    A P.
    25 January 2019 @ 11:55
    quad3 and quad4 with same parameters? quad3 probably inflation accelerating
    • BS
      Brandon S.
      25 January 2019 @ 20:46
      Yea I figured the same thing
    • AM
      A M.
      25 January 2019 @ 22:27
      Quad3 - Growth slowing as inflation accelerates. Monetary policy constrained.
  • tc
    t c.
    25 January 2019 @ 11:15
    Finally RV got around to bringing on Keith. I've done very well with his services. I think he's got it nailed.
  • JS
    John S.
    25 January 2019 @ 10:59
    Superb
  • SN
    Sam N.
    25 January 2019 @ 09:04
    This is brilliant RV just like his journey published in his Diary. Please keep bringing him in future.
    • SN
      Sam N.
      25 January 2019 @ 10:35
      I do agree that the markets have to be approached in a reactive manner than predictive, as any prediction has its limitations. Don't get me wrong but I couldn't get my heads around nowcasting the economic condition and then making respective calls based on using just a Quad model. Models and processes, even though working on underlying now-casted instructions miss out on the behavioural and human aspects. Just remembered Tom Hank's movie "Sully" which was based on a real life scenario.
    • SN
      Scott N.
      25 January 2019 @ 12:08
      Sam N. There is more to their process then the GIP quad model. They factor in behavioral and human factors using more then one approach. Hedgeye uses a quantitative price, volume and volatility proprietary model to better time the entry's and exits of an instrument.