Keith McCullough: Skate To Where The Market Is Going
Summary
Investment Philosophy: Keith McCullough emphasizes the integration of macro, micro, technicals, and fundamentals in investment strategies through his company, Hedgei, which provides a suite of products for diverse investors.
Market Environment: Keith discusses the current investment landscape, highlighting the importance of understanding market cycles and the Federal Reserve's influence on investment decisions.
Company Evolution: Hedgei, founded in 2009, has grown into a significant independent research firm, offering transparency and insights into hedge fund operations through platforms like Hedgei TV.
Market Insights: Keith predicts a transition from stagflation (Quad 3) to a more favorable economic environment (Quad 2), with potential growth in profitless tech and small to mid-cap stocks.
Investment Strategy: Emphasizes the use of risk ranges and a disciplined approach to buying and selling, avoiding the pitfalls of chasing market trends.
Product Offerings: Hedgei offers various products like the Macro Show, real-time alerts, and signal strength stocks, catering to different investor needs, from daily market analysis to long-term investment strategies.
Community Engagement: Through Hedgei Cares, the company actively supports local communities, focusing on providing resources and opportunities for underprivileged youth.
Transcript
In this episode of On the Tape, I welcome Keith McCulla, the founder of independent investment research and financial media company Hedgei. We walk through Keith's journey from Yel Hockey captain to institutional equity sales to hedge fund manager and the reason he started and has built Hedgei to where it is today. HedgeI marries the macro, the micro technicals and fundamentals into a suite of products that caters to all types of investors and advisers. We get Keith's take on the investing environment and thoughts leading into one of the most consequential Federal Reserve meetings of this investment cycle. And stick around for my week three NFL picks as I have learned my lesson by picking the Jets. Today I welcome a fellow Wall Street veteran and founder of Hedgei Keith McCulla to the pod. Or Keith, do I call you mucker? >> I'll be a little weird if you didn't call me that. So thank thanks Danny. I appreciate. >> Exactly. Well, listen. I was reading some old Yale hockey articles from the late 90s. And I want to read some of these excerpts. Okay. What McCulla does best is what isn't in the box score. That's one. Two, he is never afraid to block a shot or go hard to the net. But this is the one I think this is your quote. I thrive on working hard and being intense on every shift and trying to be as consistent as I can be. And I feel like that's a great, you know, entree into what you've built at Hedgi. I think you would agree. And by the way, kudos for being the captain of the L hockey team at a time period where they were obviously one of the best in the country. So talk about kind of maybe your evolution from maybe even that moment even prior to that to kind of where we sit today. So we can give people kind of the background on you. >> Well, thank thanks for that. That's a blast from the past, but it's definitely uh well, I guess for me it'd be the most formative years of my life, right? Like as my adult life and I guess some would still say I'm still trying to mature into an adult and uh and so is Hedgi. But yeah, we like to get in fights uh once in a while or have historically, but that's just like a I think of it as just being part of the game. Uh back then, you know, and now I I never really was the best hockey player. I never was the smartest, you know, person at Yale. I think I I remind people I had the lowest SAT score at Yale, so I had that, too. But I I I could, you know, differentiate with, you know, discipline and consistency. And that's really, you know, if there's one thing that I can do, I know I can do that. And and outworking people is a thing. And a lot of people on Wall Street, you know, they like to say, well, you know what? It really is, you know, hard work. Well, for us, you can see it every day, provided that I'm working at the top of the risk management morning. It's 4:30 in the morning. Somewhere between there and 4:45, that's when the game starts. So, for us, it's a big um project in showing people, Danny, like how the game is played from our perspective, letting you look inside of our locker room, seeing transparency, accountability, the kinds of things you'd see, uh, you know, in a in a hockey locker room. There's a reason why, you know, you everyone faces each other, right? There's there there are four walls and everyone has to come back after every period and be held to account. So, uh, I think that's a great opportunity for us and for our community and for us versus Wall Street. So, we do like to make it, as I'm sure you've noticed, you know, an us versus them type of a thing, kind of Mac versus PC, and that's that's okay. If I didn't have anybody to play against in the morning, I wouldn't know what to do. >> So, let's back up a little bit because our journeys were somewhat similar, although you captain Yale hockey team and I think I was the captain of the inter mural softball team for Pyappa out at Emery, but we, you know, we won't go into that. But uh but let's talk about you were equity sales like I was and then you went to a few hedge funds and you were at Carlile Blue Wave I believe towards the end of your buy side days and you wrote a book about it but talk about that experience because all these things you know I think being on the sell side and the buy side kind of give you a great vantage point and then I want to lead into why you started hedge eye we're going to get into the suite of products you're offering then certainly current thoughts on the market here. So >> yeah, we you and I were very fortunate. I think you know any with everything in life, it's timing. Like when did um you know when did God give me an opportunity to play at Yale? Well, it turns out that I wasn't on a bad team, I was on a championship team. When did I get to go to Wall Street in, you know, the late 1990s when it was an absolute bubble and I sat on uh what was called the equity sales desk. So I got to pick the phone and you any it could have been anybody from Steve Cohen to, you know, pick your your hedge fund uh that was calling in that day and you had to answer it, right? I mean like those those are types of things that I would never be able to give or I first of all I'd never want to give back and those are experiences as you know that help you understand you know the flows of the game now the flows of the game back then block trading you know you know bullying orders and different you know trying to get IPO allocations whatever whatever was the you know kind of the task of the day very different than today where the flows of an algorithmic machine are really driving things and I think for me you know that's a real important um perspective, that experience and understanding where the game came from when you and I were born into it and where it's evolved to and where it's going. I think that those, you know, to use a hockey analogy that everybody would use, it's like, you know, Gretzky's, you know, you know, most famous quote, you go to where the puck's going, right? And um and and for me, you know, the flows in particular have been, you know, probably the most interesting part of the market in the last half decade or so in terms of how how they've evolved and impacted markets. >> Yeah. So being in cycles where the phone rings and someone says, "How many shares did I get in an IPO in the late '9s versus 2001 and two when you're begging them to participate in deals, you get to see it all." So let's fast forward here then, you know, post hedge fund days, you you really wanted to create an independent research firm. Um, you obviously saw what we saw at Front Point in terms of of the macro of what was happening at the time. You were unable to execute like we were because you weren't in the right seat at the right time and they weren't listening to the stuff you were saying about what was happening. great financial crisis obviously but you went and started hedgei I think right like 2009 if I'm not mistaken somewhere in that in that time period and you built an incredible firm and then I would say hedgei TV I believe started in 2014 and that was before people were using YouTube for any type of financial you know type type shows and stuff so talk about what led you to that and we're going to get into your product offering maybe you could talk about that now today the stuff that you have and the analysts which you've obviously >> yeah I mean Like I said, it's timing, timing, timing. I was blessed with timing. I was blessed to be fired in 2007 for being wrong and being too bearish on the market in September, October of 2007, right? Uh that, you know, the stock market of course stopped going up for a while starting in November of07. So again, that to me was a blessing. Why? Because I didn't know I was going to start hedgei dying. I I still don't know what hedgei is ultimately going to be. I mean, every day, God willing, I you wake up two feet on the floor and two hands on the keyboard and try to figure it out using the tools that I have. But again, I I didn't time Twitter. I didn't time YouTube. I just used those tools because they were just like uh you know, going from a wooden to a to to a non-wen hockey stick. I mean, one obviously is better than the other. So, you know, that was really, you know, what happened was that that gave me an opportunity because I I could have easily gone back and started my own hedge fund again. I sold mine in ' 06. uh ended up at Carile after that deal, you know, went down. But I mean, if I I I could have done that. I actually started that's how that's how hedge I started. It was called the MCM blog. You can kind of look it up if anybody wants to to go back to the the origins of the time stamp, you know, because I just showed everybody my book. I still do today. And and today, um you know, I I I show my long only portfolio, my my family's retirement account. Um so again, for me, it's always been about that, right? like you know what you see is what you get. You may not like it, you may hate it, whatever. You might actually like it. Who cares? Uh these are the positions that I have. This is how I came up with these positions. And and ultimately, you know, hedge eye, that's how I came up with that name when I finally decided uh that I wasn't going to run institutional, you know, hedge fund money. I was going to try something different that didn't exist. Like if you could look inside of a hedge fund, what could you see? That's why I called it hedge eye, right? You know, brilliant idea, right? I mean, just combined two very simple words. One, as I'm sure many would would agree, uh, is considered in some cases like a dark Sith Lord or something. You know, what is a hedge fund? Uh, but again, let's put some transparency on that. Let's and let's let's let people see what we actually do. What are the tools that we use, right? So, hedgei today, like what we provide is still always one and the same thing, which is these are the tools, Danny, that I use today to make deci decisions. You know, I would never trade a market without a risk range, for example. So, risk ranges. Yeah, I have risk ranges from everything from Google to gold. Um, that we publish every single day. So, top of the range, you sell, bottom of the range, you buy. I know it's a unique concept in this kind of yolo era for different for people that are half our age. But, um, it's not an age thing. It's just what I do, right? I mean, I don't chase. I don't buy high and sell low or, you know, freak out low and and chase higher. I mean, that's just not what I do. So everything that we do in including more sophisticated models you know in terms of you know predicting or now casting things like inflation uh right down to the decimal point these are all things that I wouldn't be able to do without a team right you can't you can't run a a massive hedge fund or one that uh is doing everything that a hedge fund would do and they do pay us you know to to to see what we're doing um without a team. So, I'm grateful for my teammates, you know, when we when we when we publish things, whether they be lists of signal strength stocks, you know, yeah, it's got my quantimental risk range and signal embedded in it, but it's it has to have a a senior analyst on top of it with a model experience in the sector, you know, it's not just some some dude and some dudet running their mouths with a chart. I mean, it's it's a very different experience. And um again, I think there's a big a big runway in terms of communicating and and and and showing, you know, more and more and more of what we do on a live on a live switch. >> So, we got four lines in hockey. Let's talk about this this quad process. You have quad one, two, three, and four, I believe. And that's how you kind of segregate names there. And I also want to talk to you about you have these fundamental analysts, right, that are bringing you ideas. What do you do in the situation where the quad doesn't match up with the idea whether it's a a long or a short? Talk to me about uh kind of the quad and then what you do in that situation. >> Yeah, thanks for that. I've never been asked that way about that, but there are four lines on a on a hockey team and there are four quads. >> I just want to keep the theme going, Keith. All right. >> What you don't want to be like like I was as a freshman is on the fourth line. All right. Unless uh your team wins every game and that's your role. Uh we were terrible my freshman year and I was still on the fourth line every freaking game. Um so that that's not good. Quad four is not good. So quad four is is the one thing that we've never missed. Now there are four different quads in quad one and two. The first and the second line are the good good spots for US growth uh profit growth in particular in quad 2. Uh quad three is stagflation and quad four is disinflation or deflation. We've we've seen both. We've called both. Now again, that's the number one thing that institutional clients pay us for and then once an individual or family office figures out what we're what we're talking about, you know, because that's that's the one thing Wall Street never really gave anybody, right? You know, Bogle gave you low fees. You know, people give you this, they give you that, they give you they give you newsletters where you're permanently long things, you're a gold bug or whatever. Um, but they don't give you risk management, right? They don't get you out and and you definitely can't get out with without my Canadian accent on that. So, so again, like you could always go back to the fourth line, but you can't get out of that spot once it it's already happened. Like we had a stock market crash in 2025. It was between February and April and and we called quad 4 in February and it ended in April. I mean, you didn't have to have a recession. You just had to have the rate of change of growth and inflation slowing and profits slowing at the same time. Every single time that's happened since I started the firm in o in in '08, uh that has predicted either a major stock market decline, draw down or crash. So that's really the thing that we have because any yo-yo can tell you what to buy like buy stocks when you're in quad one or quad 2. Just watch CNBC. I mean it's not it's a certified clown show, right? I mean anybody can pick a stock in a bull market. The question is like how do you risk manage your way out of a bull market into a sideways market, a straight down market, etc., etc. So those four quads um you know to simplify the complex I use my signaling process to frontr run the quads the quads are the economic outlook uh the environment that you're going to be in and the signals are telling you when to time that because of course just telling the market when it should go down which you know legions of bears are dying uh every single day uh on that vine you know this year since April um you know they're they're learning that lesson the hard way the stock market's not crashing we're not anymore and we're not in a recession So, where are we right now? Sorry. So, if you're looking at the S&P 500, let's say the overall market, what quad are we in? And then maybe this is a dumb question, but can you go from three back to two or once you're at three, are you going to four? >> No, there definitely no dumb questions about this. I think the dumbest thing you can do is tell the market what to do and andor the economy, right? Like what it could or should do. And and you know, in this day and age, you know, whether they're our age or or half our age, people are are hostage to their political biases. you know, the fields as I like to call them on what that, you know, the world is according to them and therefore what it could or should be. Um, you know, right now we have a what we call quad count. So quad count is what are the next three quarters of the quads because I like I'm I'm really bad when I get beyond a year in terms of an outlook, but once I get inside of like three quarters, nine months in that window of of really a month to nine months is that's where we have our highest batting averages and make um not just our most contrarian calls like make money when other people are losing theirs, but it's it's more or less, you know, that's the what is the quad count. So again, uh we we're currently coming out of quad 3, which is a stagflationary quad where labor data has been the weakest of the growth slowing data and re-entering what we call quad 2. So quad 2, we've seen fits and starts of that where you get inflation up, growth back up. Like today's retail sales number was a clean cut quad 2. Like if you're a bear and you're expecting a recession, retail sales are up 5% year-over-year. I mean that's like that's that's double a good year in a former cycle. So, you know, you we're in quad two going what we think in the first half of next year, Danny, is going to be a quad one. So, that's what I mean, like quad three. Okay, there's enough slowing to get the Fed to cut. And this is what really makes this is what's made me so bullish, which is I I wouldn't say it's unnatural, but I'm generally not known as like permable for sure. I mean when you have only growth at getting better in rate of change terms because three is less good than two and and two is less good than one go one is really goldilocks because one you don't get Fed rate hikes the economy continues to accelerate and you get a broadening of the rally so that's that's why we're long like for the first time since 2021 which took a while uh the Russell 2000 for example or or more broadening type equity positions into small midcap single stock ideas and and things of the like that work when you have that progression 321. >> So, what's your range then if you were to give a range on the S&P? I know you do this daily, but where are you looking right now over kind of the next towards the end of the year then? >> Uh, it's it's that like I don't do like the year-end target. I mean, I basically do a daily target, right? I mean, and I do I can do an intermediate term target. I can get easily, you know, north of six, I think it's 683, a number on the S&P like that. Um, if I give myself three months, if I just give myself a day, I just get a new all-time high. Uh, so for example, uh, today, if I just like look at my notes, we're very specific about this. Like today, we're at 6644 on the S&P 500. Um, that answering that question took me a while, right? Like all my bosses wanted to know, Keith, what's your price target? Where are we going? Um, so I give them an answer because they were paying me, you know? Um, but it didn't mean it was the right answer, right? I mean the amount of times if they were to actually go back and look at what they paid me relative to how many times I had that answer wrong in that moment would be a very wide gap right whereas where I actually decide to sell something and buy more of something was a totally different exercise right so my general position is here's my book today we're positioned for all-time highs in gold all-time highs in Q's all-time highs in silver all-time highs in what some people think are ridiculous ETFs like something like UFO, for example, uh investing in space. Um you know, again, these are all uh longs until they're not. And the runway on the quads would say that again that those higher highs and higher lows, higher all-time highs, which last I checked, I always say is a long time. Um you know, those should continue until they don't. >> How do you reconcile from a fundamental hat perspective, you know, the dollar obviously coming down like it's had like it has it has an impact obviously on maybe the S&P 500 moving higher. It's the reason that gold and other commodities might be rising. So those signals that you're getting aren't necessarily healthy reasons that the market might be move might, you know, might be moving higher. But how do you think about that? Because the one thing that I think you would agree that has driven all of this or the biggest concern are rates themselves. And so if the 10ear yield were to spike higher for whatever reason, whether that failed auction, you know, whatever, I'm just making stuff up that could that could happen out there. How do you adjust on the fly? And are any of your signals right now counterintuitive? like, okay, I see that and I agree with it, but if that's true, then I'm concerned. >> Well, there like whether or not they're healthy or not doesn't make or save me money, right? Like whether or not I'm positioned properly for it or not is what determines the answer to that question, right? So yeah, yes, it's unhealthy over the intermediate to long term for the dollar to make lower lows for Bessant not to address the deficit at all, you know, for you to continue to stay with the same old saw of begging for more cowbell from the Fed, you know, down dollar down interest rates. But that's been the trade that we've had on like that's not that's not like luck, right? I mean, that's what quad 3 is. you have enough growth slowing data where the Fed can be uh bullied in this case politically to to go for 50 basis points potentially tomorrow on cuts instead of 25 you to not raise rates to replace the Fed head all those things are unhealthy I mean it's like Scott Besson today was was was poking fun at like you know how long I guess he was talking about that that bruho how he got in into with Py like he threatened to punch him in the face or whatever which I thought was funny but he you know he's like look this has been going on since Alexander Hamilton you since people were dueling, you know, with with Treasury Secretaries. Well, you know, like that that's true. I mean, but, you know, the market's eventually going to have an epic duel with Scott Bessen and the administration if they don't address the deficit. Now, we have a process for that. You know, when bond yields start to signal that they're done going down and the dollar starts to break out, then uh I will likely have a very different position. I mean currently if you look at gold which has been like our most successful you know major asset allocation and it should be in quad 3 we've in every quad we back tested everything that ticks the number one asset class you know major asset class uh and holding you should have is gold you know gold's its own currency according to us and the volatility of gold historically uh that's quad 3. So is the best of gold um going to end when bond yields stop going down and the dollar stops going straight down with it? It should be. I mean, there's a 90 95% inverse correlation between those two things. So, you know, the the the the key is to wait until the market signals that that is done with because it's so easy to be early saying that this is just bad. It's going to end in tears. I mean, we all know it's going to end in tears. It just so happens that there aren't that many people on Wall Street that ends end up timing the tears properly, right? And that's that's my goal. And um I want to be uh you know, you know, I don't like to lose. I want to be undefeated next time the stock market crashes again. So, um, that would be a good thing is to notice those things and I don't know when I'm going to notice them. >> I'm with you on the gold. Curious to get your thoughts on Bitcoin and I can give you mine, but I I'd love to get your thoughts on that. How how you might have evolved like I've tried to evolve over time here on this. >> Well, I mean to me anything that's liquid that trades I'll evolve alongside it. I mean I like I'm short sugar and I'm long Ethereum. I mean, you know, am I more bullish long term on on on the consumption of sugar than Ethereum? I don't know. I don't care. Uh what I care about is the price volume and volatility attributes of whatever it is it ticks. And the longer that that thing can exist, you know, in time and space, the longer it proves itself. And that's what Bitcoin's done. Bitcoin back testing against the quads almost always crashes and certainly uh always draws down in quad 4. Okay. So, we're not in quad four. We were short Bitcoin from February to April. Now we're back on the long side of Bitcoin. The the the relative or the you know what we you call the performance divergence between Ethereum and actually Salana, anything that we model, we have a whole digital assets research effort here. Um like if you look at Salana, Avalanche, any of the signals that we publish on daily, they're just like ripping new highs. Whereas Bitcoin is signaling lower highs. You know, some people think that that's like a canary in the coal mine because it's been often the canary in the coal mine. has front run the NASDAQ weakness multiple times. Uh in this case, I think that there's a a dynamic setup here with Sailor having screwed so many people over with his narratives and changing, you know, the the goalposts while he sells stock into it because you got all these, you know, Bitcoin treasury companies that are listed publicly now that are just like le on the same Ponzi, right? They're all levering up to, you know, using debt to lever up to buy the damn thing and saying that that's a stock. Um I think that that like from our research perspective that is highly divergent versus something like um Salana which is just f getting its initial you know kind of treasury buyers of of the crypto. Um but we'll have to see I mean if I look back and this market end like if the world ends tomorrow according to the people have been saying it since May um you know maybe that'll be part of it. I mean, cuz that's definitely a signal that has been um signaling, like I said, lower highs. When something's lower highs and goes to bearish trend on my signal, that's the get out signal. Currently, Bitcoin, yes, lower highs, less momentum than the NASDAQ or gold, but it's still signaling bullish trend. >> I couldn't agree with you more on these treasury companies that are buying crypto that are levered. I if you like the space, just buy, you know, the underlying itself. Um, >> yeah. So >> yeah, why would you? But like like you and I, it's not our first rodeo. I mean, but but a noob or whatever they call themselves these days, they keep changing it. Um but you know, why would you pay a premium to a guy named Sailor, you know, when you could just go buy the damn ETF even if you can't buy it on a Coinbase account? Like I mean with no premium, it doesn't make any sense. >> I agree. Um all right. So you you cater to hedge funds, longonies, retail advisors. Basically you run the gamut. I'm curious right now from a sentiment perspective what you're getting. You kind of gave you kind of alluded already that the institutions kind of um aren't as long as you think they potentially could be, although I've seen manager surveys that indicate they're they're now on the chase. Give me a sense of of of what you're getting back in terms of feedback from each of those cohorts. >> I would say I mean the biggest push back we had in the last month was us taking on finally taking on a long position in the Russell 2000. I mean that uh didn't seem to me it's not only just what it was in terms of client feedback saying ah it's you know this is a dog there's the lack of profit growth blah blah by the way profitless tech is one of the best factor exposures you could be long right now um so profit list actually in quad 2 uh as perverse as that sounds is one of the best places to be so is high short interest Russell has a lot of those things you know our hedge fund clients definitely didn't uh unanimously agree with that call let's just start with that you can look at CFTC futures and options position which we do every single week um you know non-commercial and you can see the biggest net short position coming into the last month really the last two uh was indeed the Russell 2000 and there's not an inconsequential net short position like I think it's 117,000 or thereabouts net short contracts in in S&P index e- minis um etc. So, you know, there this has been a wall of worry, man. Like, you you get this push back and and feedback all the time, especially from hedge funds that have to run neutral. Um cuz it's really really hard to run neutral when the market's not neutral. That's why I don't run neutral. I mean, it's I'm not saying it's not a hard job. It's actually a way harder job to me. That's like you're shrinking the strike zone. and I'm I suck at baseball anyway, but you know, you're really shrinking the strike zone and you're and you're you're making it a lot harder on people to perform. So, I think some of that feedback is it's just getting harder in an overs supplied industry, hedge funds to generate alpha. And I don't know if that has anything to do with with the cycle or anything. And then finally uh you do get a lot of you do get a lot of push back from long onies on market structure or the flows of the machine because they they keep looking at valuation. I don't start with valuation. I don't say I don't use valuation. We use or you know valuation to augment our views but you know the flows of the machine are highly misunderstood. the the structure of the options market, the contribution of uh ODTs to daily flows. These things are like mostly where the long only community is kind of still exploring and trying to understand versus their you know what you and I would have done 20 years ago which is not look had to look at anything like that at all. >> Yeah. some of these large market neutral shops that you're talking about, they can't even afford to even look at names underneath, let's call it, you know, 10 billion market cap because they need liquidity and they need to get in and out over time. The thing about the Russell, and tell me if I'm wrong on this, it really is tied to one thing, which is rates. And when the 10-year yield moved from 4 and a half to four, effectively, shorts needed to start covering because it is the one fundamental thing that impacts um a lot of small companies is the ability to finance themselves. So, you would agree with that? >> Yeah, that and profit growth. I mean, we were short the Russell from the end of 2021 to not not a we didn't have a long or short position coming into this year uh post being shorted in into April. But so we went from no position to a long position instead of what we would routinely go to a short position. Why? To your point, rising interest rates, rising cost of capital, negative earnings, depression, like some people like to call recessions, we called a depression in Russell earnings. I mean, there was at one point year-over-year earnings at the bottom 22 into 2023, you know, Danny, were like minus 38% year-over-year earnings growth for the Russell. I mean, that that is brutal, right? So, now the Russell 2000, yes, bond yields, I agree that's one factor, but another major factor, which again aids in the bets that the the the factor that you mentioned is the rate of change of Russell earnings growth is now positive double digits with very easy comparisons. So, you know, that's almost a perfect setup for me. easy base effects or easy base effects in a former short um that people are still stuck in for the former reasons that have since turned materially the other way. It's not to say that bond yields don't bounce and the dollar goes up that everything stocks never mind the Russell's not going to correct but you know from from here on I mean into quad one you'd stay along the Russell >> Russell working its way up the hockey line so to speak. All right. So, let's talk about the the product that you offer and what so you have you have the macro show which we see you on. You have a product offering called uh um I'm elite macro. You got the call. Talk to me about all the offerings that you have and then you do conversations um which which you do from time to time. So, talk about everything. You're a busy guy. Talk about everything you do over there. So, >> yeah, those conversations we call them real conversations. I that we try to make them free because I I think one of like with all the blessings that I've had in terms of, you know, where I was put, like I said, in the game, you know, God willing, I stay in the game on the right side of the grass here. But I mean, like I like to I like to educate or at least try. Uh so those real conversations are free. People can go to hedgeitv.com and see the whole archive of those. But yeah, really our product offering follows my my my process, right? Like so again, if you want to if you want to wake up and get a summary of a pre-market setup across all of macro, you watch the macro show. If you want to watch uh an entire research team and me running the research team for an hour, that's what the call is. You can you can basically watch our morning meeting. And that's all essentially taking the top down views and tying them to stock picks. So for people who only want to, you know, pick stocks, that might be what they do, right? Um and then and then as we get like in terms of like the bigger products like macro pro or like the higher price products, it just gives you everything. It's it's more of like a full access point. What we find is that you know people will pick and choose what you know what interests them. Real-time alerts, for example, are intraday market co, you know, thoughts, obviously, long short signals, you know, what I call coaching notes. Um, what I see kind of in-game like, so, for example, when I'm done with this, my trades into the close, I mean, I'm going to fade a weak close because now people are trying to hedge an event that I don't think really needs much hedging until determined otherwise. So, you know, I'll have some buy signals. I'll say this is why, you know, this is my volatility signal heading into it. So, that's very short-term and that's why sometime sometimes people paint me as very short-term, which is fine. I'll I'll take any paint, any color, as long as you're paying attention. But the, you know, the the intermediate to long-term views, the macro pro subscription, the Elite Pro subscription that you mentioned, thank you for mentioning those. that those get you access to our quarterly and mid-carter update calls where we'll drop 100 to 150 slide deck of of macro content with all the positions uh which include like I I'll go around max u 30 positions in my long only book in terms of ETFs and that's another product portfolio solutions that that now I show like I said at the outset of our conversation every single day I show every move that I make in portfolio solutions that would include new positions removed position positions, positions that I add or subtract. >> So, we're on the eve of the Fed here. When this comes out, it'll be it'll be the morning of the Fed, so this is still preed. Um, I know you're expecting potentially a little sell on the news because from a dovish versus hawkish perspective, it's hard to get more dovish than, you know, what is it? 70 high7s% chance of three cuts. Basically, cut at each of the next three meetings for the rest of the year. So, the language is the one thing that people can look at and the dot plot, whatever that's worth. So, are you a little cautious? I know you don't try to time it on a daily basis, but with option expiration happening, a massive o option expiration happening on Friday, feels like we might have next week might be the time where something could kind of show its head. >> Yeah. Anytime I mean anytime the NASDAQ goes up for nine straight days, you should be, you know, in caution mode. I don't care if uh what the catalyst is. In this case, it's it's the mother of all catalysts, right? So, you have, you know, big time um you know, big- time political pressure. were in the max pressure zone for Pal against who I call pump or Trump. I mean, so you got you pump wants more pump and pal most likely is going to say, "Wow, the inflation data went back up once we get that data." But we don't get that data till after this Fed meeting. So, you know, because we have an inflation now. That's one of the most valuable things we publish that comes out weekly. Um, that's part of the macro pro subscription, different subscriptions that you mentioned. Um, so I I think that there are multiple, you know, steps to get there. Uh, but overbought is as overbought does. It's not it's not a it's not a hard concept to understand. You know, gold's made so many all-time highs I can't even count them. At least with the NASDAQ, I can count them. Um, but so yes, at some point bond yields are going to bounce, the dollar is going to bounce, and you're going to get a counter trend, what we call counter trend bounce and everything that people that missed it eventually chased at the specific point where you should be trimming or booking some gains. So, let's talk about your research offering because not to get lost in all this macro, you have a great um lineup of analysts that bring ideas obviously to the forefront. And I would imagine when they line up with when you're talking about, you know, switching from being short rustled to long, when one of your analysts has a small cap name with incredible fundamentals uh and a buy rating, I would imagine that's when the two kind of marry together. Is that accurate? And talk about some of the kind of the analysts that you've brought on that do have a pretty good following on the street. >> Yeah, bingo. Like I like I said, I'm blessed with my teammates. I mean, I couldn't do this uh with the accuracy that we do or or the precision in terms of modeling and having views on single stocks obviously without analysts that know what they're doing uh and grinding it out every day. So, you know, my favorite product on that is called signal strength stocks because I basically think about it this way, Danny. I basically take all their tickers, throw them into the machine, and the machine with my again my my my my machine just basically throws out what are the bullish trends and what are the bearish trends. So if an analyst says I really like this small midcap idea and my signal doesn't, I just throw it up or I put it on the side and redo it, you know, when I redo the tickers the next day. Um, so that's a it's a very powerful tool. What you find is that the quantimental view is much more powerful in terms of its alpha generation and its accuracy than my former self which would just I was just like a stock picker on the buy side. Um so now we got both and when you make a to your point a quad shift and you get into small and midcaps we went from I think we went from like 50 to almost 100 sig signal strength long ideas that I would buy that come out of my analyst team and I think that's a new record. So that in and of itself was a huge signal because that that was like double the shorts uh in terms of what the machine was actually signaling internally from our own team's research perspective. So yeah, I go through it every morning on the call with these guys. When something is, you know, oversold or overbought, we'll address it. We try to make that actionable. Uh and you probably see that in real time alerts throughout the day as well. >> The hedge machine. All right, before we get out of here, you're not just a pretty face. Um, talk about Hedgei Cares because you guys have done a ton within the community. I know it's a passion of yours. Talk about that a little bit because I think that gets lost in in all the stuff that that goes on on Wall Street. >> Well, thanks. We have our actually we have our um uh charity golf outing uh next week. We actually put up for the first time we finally, you know, came up with the genius idea to make our charity auction online so people who don't live around us could uh could contribute if they wanted to. But, you know, for us it's like like let's give back to our community. I mean, it's hard for me to live in Westport, Connecticut, and not see Bridgeport, Connecticut, if I choose to have my hedge eyes open, right? Like, so, you know, that the Bridgeport Kuribbe, you know, youth league, that's that's a big one for us that we've sponsored and supported for many years now. That's again providing, you know, basic things that people like us, you know, take for granted with our kids. I mean, I coach kids in a in a what is becoming a rich kid sport, hockey, unfortunately. Um, you know, a lot of these kids like whether it be their just their their basketball shoes, you know, the cheerleading outfits, you know, stuff like SAT training, you know, if they are a good athlete, they have no resources. Those are the kinds of things that we're super interested in supporting and going directly to it because we know we can have a direct impact in our own community. So, that's um that's big for us and and we appreciate any any kind of support anybody wants to have alongside us. >> Well, that's great, Keith. Then people find you on um hedgei.com or maybe you tell us exactly where they can find. Is that is that accurate? They type in hedgei and they can find all the product offerings. >> Yeah, I have a lot of issues, but finding me shouldn't be that hard. >> Exactly. Well, Keith, I really appreciate you uh coming on the tape. I hope to have you back again. Uh we'll follow all the quads. People out there should follow you at the very least. If they don't want to pay for product, they certainly can get access to you like you said through the videos and then on X and various places. But, uh, it's great to have a voice like yours out there that has the experience and so looking forward to having you back on the tape. >> Thanks. Appreciate it, Dad. >> All right, NFL week three coming off an 0 and2 week, which brings my record to two and three on the season. I thought Russell Wilson would stink. He didn't. Giants still lost, but they covered and shame on me for taking the Jets again. I'm spending way too much time with Vincent Daniel. Um, the season feels like every game is right on the number and it's come down to the last second type plays. So Eagles look to be the best team I think in the NFC. The Rams visit them. They're on the road for a second straight week. It appears they beat a bad Houston team, bad Titans team. I'm talking about the Rams, so hard to give them credit for that. Eagles look really good and complete. Give me the Eagles minus three. Chargers look for real. Uh last night they beat the Raiders in Las Vegas. They're hosting the Broncos who I like, but they just seem out of sorts. So Chargers look more complete. I would take them at home. It's their first home game, by the way. They played in Brazil and then they obviously uh played on the road last night in Las Vegas. So give me um the Chargers and lay the two and a half. And lastly, I'm going back to the Well, I'm taking Dallas getting one and a half in Chicago. Chicago defense looks awful. I think the Cowboys will expose them and I think they're going to use the momentum from their overtime win against the Giants uh from last week when they go on the road here. So Dallas, the Chargers, and the Eagles are my three picks for the week. I'm looking to bounce back. Thanks for listening to the On the Tape podcast with Danny Moses. If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast and please leave a rating and review, positive only. You can also watch on the on the tape channel on YouTube and give us a thumbs up there as
Keith McCullough: Skate To Where The Market Is Going
Summary
Transcript
In this episode of On the Tape, I welcome Keith McCulla, the founder of independent investment research and financial media company Hedgei. We walk through Keith's journey from Yel Hockey captain to institutional equity sales to hedge fund manager and the reason he started and has built Hedgei to where it is today. HedgeI marries the macro, the micro technicals and fundamentals into a suite of products that caters to all types of investors and advisers. We get Keith's take on the investing environment and thoughts leading into one of the most consequential Federal Reserve meetings of this investment cycle. And stick around for my week three NFL picks as I have learned my lesson by picking the Jets. Today I welcome a fellow Wall Street veteran and founder of Hedgei Keith McCulla to the pod. Or Keith, do I call you mucker? >> I'll be a little weird if you didn't call me that. So thank thanks Danny. I appreciate. >> Exactly. Well, listen. I was reading some old Yale hockey articles from the late 90s. And I want to read some of these excerpts. Okay. What McCulla does best is what isn't in the box score. That's one. Two, he is never afraid to block a shot or go hard to the net. But this is the one I think this is your quote. I thrive on working hard and being intense on every shift and trying to be as consistent as I can be. And I feel like that's a great, you know, entree into what you've built at Hedgi. I think you would agree. And by the way, kudos for being the captain of the L hockey team at a time period where they were obviously one of the best in the country. So talk about kind of maybe your evolution from maybe even that moment even prior to that to kind of where we sit today. So we can give people kind of the background on you. >> Well, thank thanks for that. That's a blast from the past, but it's definitely uh well, I guess for me it'd be the most formative years of my life, right? Like as my adult life and I guess some would still say I'm still trying to mature into an adult and uh and so is Hedgi. But yeah, we like to get in fights uh once in a while or have historically, but that's just like a I think of it as just being part of the game. Uh back then, you know, and now I I never really was the best hockey player. I never was the smartest, you know, person at Yale. I think I I remind people I had the lowest SAT score at Yale, so I had that, too. But I I I could, you know, differentiate with, you know, discipline and consistency. And that's really, you know, if there's one thing that I can do, I know I can do that. And and outworking people is a thing. And a lot of people on Wall Street, you know, they like to say, well, you know what? It really is, you know, hard work. Well, for us, you can see it every day, provided that I'm working at the top of the risk management morning. It's 4:30 in the morning. Somewhere between there and 4:45, that's when the game starts. So, for us, it's a big um project in showing people, Danny, like how the game is played from our perspective, letting you look inside of our locker room, seeing transparency, accountability, the kinds of things you'd see, uh, you know, in a in a hockey locker room. There's a reason why, you know, you everyone faces each other, right? There's there there are four walls and everyone has to come back after every period and be held to account. So, uh, I think that's a great opportunity for us and for our community and for us versus Wall Street. So, we do like to make it, as I'm sure you've noticed, you know, an us versus them type of a thing, kind of Mac versus PC, and that's that's okay. If I didn't have anybody to play against in the morning, I wouldn't know what to do. >> So, let's back up a little bit because our journeys were somewhat similar, although you captain Yale hockey team and I think I was the captain of the inter mural softball team for Pyappa out at Emery, but we, you know, we won't go into that. But uh but let's talk about you were equity sales like I was and then you went to a few hedge funds and you were at Carlile Blue Wave I believe towards the end of your buy side days and you wrote a book about it but talk about that experience because all these things you know I think being on the sell side and the buy side kind of give you a great vantage point and then I want to lead into why you started hedge eye we're going to get into the suite of products you're offering then certainly current thoughts on the market here. So >> yeah, we you and I were very fortunate. I think you know any with everything in life, it's timing. Like when did um you know when did God give me an opportunity to play at Yale? Well, it turns out that I wasn't on a bad team, I was on a championship team. When did I get to go to Wall Street in, you know, the late 1990s when it was an absolute bubble and I sat on uh what was called the equity sales desk. So I got to pick the phone and you any it could have been anybody from Steve Cohen to, you know, pick your your hedge fund uh that was calling in that day and you had to answer it, right? I mean like those those are types of things that I would never be able to give or I first of all I'd never want to give back and those are experiences as you know that help you understand you know the flows of the game now the flows of the game back then block trading you know you know bullying orders and different you know trying to get IPO allocations whatever whatever was the you know kind of the task of the day very different than today where the flows of an algorithmic machine are really driving things and I think for me you know that's a real important um perspective, that experience and understanding where the game came from when you and I were born into it and where it's evolved to and where it's going. I think that those, you know, to use a hockey analogy that everybody would use, it's like, you know, Gretzky's, you know, you know, most famous quote, you go to where the puck's going, right? And um and and for me, you know, the flows in particular have been, you know, probably the most interesting part of the market in the last half decade or so in terms of how how they've evolved and impacted markets. >> Yeah. So being in cycles where the phone rings and someone says, "How many shares did I get in an IPO in the late '9s versus 2001 and two when you're begging them to participate in deals, you get to see it all." So let's fast forward here then, you know, post hedge fund days, you you really wanted to create an independent research firm. Um, you obviously saw what we saw at Front Point in terms of of the macro of what was happening at the time. You were unable to execute like we were because you weren't in the right seat at the right time and they weren't listening to the stuff you were saying about what was happening. great financial crisis obviously but you went and started hedgei I think right like 2009 if I'm not mistaken somewhere in that in that time period and you built an incredible firm and then I would say hedgei TV I believe started in 2014 and that was before people were using YouTube for any type of financial you know type type shows and stuff so talk about what led you to that and we're going to get into your product offering maybe you could talk about that now today the stuff that you have and the analysts which you've obviously >> yeah I mean Like I said, it's timing, timing, timing. I was blessed with timing. I was blessed to be fired in 2007 for being wrong and being too bearish on the market in September, October of 2007, right? Uh that, you know, the stock market of course stopped going up for a while starting in November of07. So again, that to me was a blessing. Why? Because I didn't know I was going to start hedgei dying. I I still don't know what hedgei is ultimately going to be. I mean, every day, God willing, I you wake up two feet on the floor and two hands on the keyboard and try to figure it out using the tools that I have. But again, I I didn't time Twitter. I didn't time YouTube. I just used those tools because they were just like uh you know, going from a wooden to a to to a non-wen hockey stick. I mean, one obviously is better than the other. So, you know, that was really, you know, what happened was that that gave me an opportunity because I I could have easily gone back and started my own hedge fund again. I sold mine in ' 06. uh ended up at Carile after that deal, you know, went down. But I mean, if I I I could have done that. I actually started that's how that's how hedge I started. It was called the MCM blog. You can kind of look it up if anybody wants to to go back to the the origins of the time stamp, you know, because I just showed everybody my book. I still do today. And and today, um you know, I I I show my long only portfolio, my my family's retirement account. Um so again, for me, it's always been about that, right? like you know what you see is what you get. You may not like it, you may hate it, whatever. You might actually like it. Who cares? Uh these are the positions that I have. This is how I came up with these positions. And and ultimately, you know, hedge eye, that's how I came up with that name when I finally decided uh that I wasn't going to run institutional, you know, hedge fund money. I was going to try something different that didn't exist. Like if you could look inside of a hedge fund, what could you see? That's why I called it hedge eye, right? You know, brilliant idea, right? I mean, just combined two very simple words. One, as I'm sure many would would agree, uh, is considered in some cases like a dark Sith Lord or something. You know, what is a hedge fund? Uh, but again, let's put some transparency on that. Let's and let's let's let people see what we actually do. What are the tools that we use, right? So, hedgei today, like what we provide is still always one and the same thing, which is these are the tools, Danny, that I use today to make deci decisions. You know, I would never trade a market without a risk range, for example. So, risk ranges. Yeah, I have risk ranges from everything from Google to gold. Um, that we publish every single day. So, top of the range, you sell, bottom of the range, you buy. I know it's a unique concept in this kind of yolo era for different for people that are half our age. But, um, it's not an age thing. It's just what I do, right? I mean, I don't chase. I don't buy high and sell low or, you know, freak out low and and chase higher. I mean, that's just not what I do. So everything that we do in including more sophisticated models you know in terms of you know predicting or now casting things like inflation uh right down to the decimal point these are all things that I wouldn't be able to do without a team right you can't you can't run a a massive hedge fund or one that uh is doing everything that a hedge fund would do and they do pay us you know to to to see what we're doing um without a team. So, I'm grateful for my teammates, you know, when we when we when we publish things, whether they be lists of signal strength stocks, you know, yeah, it's got my quantimental risk range and signal embedded in it, but it's it has to have a a senior analyst on top of it with a model experience in the sector, you know, it's not just some some dude and some dudet running their mouths with a chart. I mean, it's it's a very different experience. And um again, I think there's a big a big runway in terms of communicating and and and and showing, you know, more and more and more of what we do on a live on a live switch. >> So, we got four lines in hockey. Let's talk about this this quad process. You have quad one, two, three, and four, I believe. And that's how you kind of segregate names there. And I also want to talk to you about you have these fundamental analysts, right, that are bringing you ideas. What do you do in the situation where the quad doesn't match up with the idea whether it's a a long or a short? Talk to me about uh kind of the quad and then what you do in that situation. >> Yeah, thanks for that. I've never been asked that way about that, but there are four lines on a on a hockey team and there are four quads. >> I just want to keep the theme going, Keith. All right. >> What you don't want to be like like I was as a freshman is on the fourth line. All right. Unless uh your team wins every game and that's your role. Uh we were terrible my freshman year and I was still on the fourth line every freaking game. Um so that that's not good. Quad four is not good. So quad four is is the one thing that we've never missed. Now there are four different quads in quad one and two. The first and the second line are the good good spots for US growth uh profit growth in particular in quad 2. Uh quad three is stagflation and quad four is disinflation or deflation. We've we've seen both. We've called both. Now again, that's the number one thing that institutional clients pay us for and then once an individual or family office figures out what we're what we're talking about, you know, because that's that's the one thing Wall Street never really gave anybody, right? You know, Bogle gave you low fees. You know, people give you this, they give you that, they give you they give you newsletters where you're permanently long things, you're a gold bug or whatever. Um, but they don't give you risk management, right? They don't get you out and and you definitely can't get out with without my Canadian accent on that. So, so again, like you could always go back to the fourth line, but you can't get out of that spot once it it's already happened. Like we had a stock market crash in 2025. It was between February and April and and we called quad 4 in February and it ended in April. I mean, you didn't have to have a recession. You just had to have the rate of change of growth and inflation slowing and profits slowing at the same time. Every single time that's happened since I started the firm in o in in '08, uh that has predicted either a major stock market decline, draw down or crash. So that's really the thing that we have because any yo-yo can tell you what to buy like buy stocks when you're in quad one or quad 2. Just watch CNBC. I mean it's not it's a certified clown show, right? I mean anybody can pick a stock in a bull market. The question is like how do you risk manage your way out of a bull market into a sideways market, a straight down market, etc., etc. So those four quads um you know to simplify the complex I use my signaling process to frontr run the quads the quads are the economic outlook uh the environment that you're going to be in and the signals are telling you when to time that because of course just telling the market when it should go down which you know legions of bears are dying uh every single day uh on that vine you know this year since April um you know they're they're learning that lesson the hard way the stock market's not crashing we're not anymore and we're not in a recession So, where are we right now? Sorry. So, if you're looking at the S&P 500, let's say the overall market, what quad are we in? And then maybe this is a dumb question, but can you go from three back to two or once you're at three, are you going to four? >> No, there definitely no dumb questions about this. I think the dumbest thing you can do is tell the market what to do and andor the economy, right? Like what it could or should do. And and you know, in this day and age, you know, whether they're our age or or half our age, people are are hostage to their political biases. you know, the fields as I like to call them on what that, you know, the world is according to them and therefore what it could or should be. Um, you know, right now we have a what we call quad count. So quad count is what are the next three quarters of the quads because I like I'm I'm really bad when I get beyond a year in terms of an outlook, but once I get inside of like three quarters, nine months in that window of of really a month to nine months is that's where we have our highest batting averages and make um not just our most contrarian calls like make money when other people are losing theirs, but it's it's more or less, you know, that's the what is the quad count. So again, uh we we're currently coming out of quad 3, which is a stagflationary quad where labor data has been the weakest of the growth slowing data and re-entering what we call quad 2. So quad 2, we've seen fits and starts of that where you get inflation up, growth back up. Like today's retail sales number was a clean cut quad 2. Like if you're a bear and you're expecting a recession, retail sales are up 5% year-over-year. I mean that's like that's that's double a good year in a former cycle. So, you know, you we're in quad two going what we think in the first half of next year, Danny, is going to be a quad one. So, that's what I mean, like quad three. Okay, there's enough slowing to get the Fed to cut. And this is what really makes this is what's made me so bullish, which is I I wouldn't say it's unnatural, but I'm generally not known as like permable for sure. I mean when you have only growth at getting better in rate of change terms because three is less good than two and and two is less good than one go one is really goldilocks because one you don't get Fed rate hikes the economy continues to accelerate and you get a broadening of the rally so that's that's why we're long like for the first time since 2021 which took a while uh the Russell 2000 for example or or more broadening type equity positions into small midcap single stock ideas and and things of the like that work when you have that progression 321. >> So, what's your range then if you were to give a range on the S&P? I know you do this daily, but where are you looking right now over kind of the next towards the end of the year then? >> Uh, it's it's that like I don't do like the year-end target. I mean, I basically do a daily target, right? I mean, and I do I can do an intermediate term target. I can get easily, you know, north of six, I think it's 683, a number on the S&P like that. Um, if I give myself three months, if I just give myself a day, I just get a new all-time high. Uh, so for example, uh, today, if I just like look at my notes, we're very specific about this. Like today, we're at 6644 on the S&P 500. Um, that answering that question took me a while, right? Like all my bosses wanted to know, Keith, what's your price target? Where are we going? Um, so I give them an answer because they were paying me, you know? Um, but it didn't mean it was the right answer, right? I mean the amount of times if they were to actually go back and look at what they paid me relative to how many times I had that answer wrong in that moment would be a very wide gap right whereas where I actually decide to sell something and buy more of something was a totally different exercise right so my general position is here's my book today we're positioned for all-time highs in gold all-time highs in Q's all-time highs in silver all-time highs in what some people think are ridiculous ETFs like something like UFO, for example, uh investing in space. Um you know, again, these are all uh longs until they're not. And the runway on the quads would say that again that those higher highs and higher lows, higher all-time highs, which last I checked, I always say is a long time. Um you know, those should continue until they don't. >> How do you reconcile from a fundamental hat perspective, you know, the dollar obviously coming down like it's had like it has it has an impact obviously on maybe the S&P 500 moving higher. It's the reason that gold and other commodities might be rising. So those signals that you're getting aren't necessarily healthy reasons that the market might be move might, you know, might be moving higher. But how do you think about that? Because the one thing that I think you would agree that has driven all of this or the biggest concern are rates themselves. And so if the 10ear yield were to spike higher for whatever reason, whether that failed auction, you know, whatever, I'm just making stuff up that could that could happen out there. How do you adjust on the fly? And are any of your signals right now counterintuitive? like, okay, I see that and I agree with it, but if that's true, then I'm concerned. >> Well, there like whether or not they're healthy or not doesn't make or save me money, right? Like whether or not I'm positioned properly for it or not is what determines the answer to that question, right? So yeah, yes, it's unhealthy over the intermediate to long term for the dollar to make lower lows for Bessant not to address the deficit at all, you know, for you to continue to stay with the same old saw of begging for more cowbell from the Fed, you know, down dollar down interest rates. But that's been the trade that we've had on like that's not that's not like luck, right? I mean, that's what quad 3 is. you have enough growth slowing data where the Fed can be uh bullied in this case politically to to go for 50 basis points potentially tomorrow on cuts instead of 25 you to not raise rates to replace the Fed head all those things are unhealthy I mean it's like Scott Besson today was was was poking fun at like you know how long I guess he was talking about that that bruho how he got in into with Py like he threatened to punch him in the face or whatever which I thought was funny but he you know he's like look this has been going on since Alexander Hamilton you since people were dueling, you know, with with Treasury Secretaries. Well, you know, like that that's true. I mean, but, you know, the market's eventually going to have an epic duel with Scott Bessen and the administration if they don't address the deficit. Now, we have a process for that. You know, when bond yields start to signal that they're done going down and the dollar starts to break out, then uh I will likely have a very different position. I mean currently if you look at gold which has been like our most successful you know major asset allocation and it should be in quad 3 we've in every quad we back tested everything that ticks the number one asset class you know major asset class uh and holding you should have is gold you know gold's its own currency according to us and the volatility of gold historically uh that's quad 3. So is the best of gold um going to end when bond yields stop going down and the dollar stops going straight down with it? It should be. I mean, there's a 90 95% inverse correlation between those two things. So, you know, the the the the key is to wait until the market signals that that is done with because it's so easy to be early saying that this is just bad. It's going to end in tears. I mean, we all know it's going to end in tears. It just so happens that there aren't that many people on Wall Street that ends end up timing the tears properly, right? And that's that's my goal. And um I want to be uh you know, you know, I don't like to lose. I want to be undefeated next time the stock market crashes again. So, um, that would be a good thing is to notice those things and I don't know when I'm going to notice them. >> I'm with you on the gold. Curious to get your thoughts on Bitcoin and I can give you mine, but I I'd love to get your thoughts on that. How how you might have evolved like I've tried to evolve over time here on this. >> Well, I mean to me anything that's liquid that trades I'll evolve alongside it. I mean I like I'm short sugar and I'm long Ethereum. I mean, you know, am I more bullish long term on on on the consumption of sugar than Ethereum? I don't know. I don't care. Uh what I care about is the price volume and volatility attributes of whatever it is it ticks. And the longer that that thing can exist, you know, in time and space, the longer it proves itself. And that's what Bitcoin's done. Bitcoin back testing against the quads almost always crashes and certainly uh always draws down in quad 4. Okay. So, we're not in quad four. We were short Bitcoin from February to April. Now we're back on the long side of Bitcoin. The the the relative or the you know what we you call the performance divergence between Ethereum and actually Salana, anything that we model, we have a whole digital assets research effort here. Um like if you look at Salana, Avalanche, any of the signals that we publish on daily, they're just like ripping new highs. Whereas Bitcoin is signaling lower highs. You know, some people think that that's like a canary in the coal mine because it's been often the canary in the coal mine. has front run the NASDAQ weakness multiple times. Uh in this case, I think that there's a a dynamic setup here with Sailor having screwed so many people over with his narratives and changing, you know, the the goalposts while he sells stock into it because you got all these, you know, Bitcoin treasury companies that are listed publicly now that are just like le on the same Ponzi, right? They're all levering up to, you know, using debt to lever up to buy the damn thing and saying that that's a stock. Um I think that that like from our research perspective that is highly divergent versus something like um Salana which is just f getting its initial you know kind of treasury buyers of of the crypto. Um but we'll have to see I mean if I look back and this market end like if the world ends tomorrow according to the people have been saying it since May um you know maybe that'll be part of it. I mean, cuz that's definitely a signal that has been um signaling, like I said, lower highs. When something's lower highs and goes to bearish trend on my signal, that's the get out signal. Currently, Bitcoin, yes, lower highs, less momentum than the NASDAQ or gold, but it's still signaling bullish trend. >> I couldn't agree with you more on these treasury companies that are buying crypto that are levered. I if you like the space, just buy, you know, the underlying itself. Um, >> yeah. So >> yeah, why would you? But like like you and I, it's not our first rodeo. I mean, but but a noob or whatever they call themselves these days, they keep changing it. Um but you know, why would you pay a premium to a guy named Sailor, you know, when you could just go buy the damn ETF even if you can't buy it on a Coinbase account? Like I mean with no premium, it doesn't make any sense. >> I agree. Um all right. So you you cater to hedge funds, longonies, retail advisors. Basically you run the gamut. I'm curious right now from a sentiment perspective what you're getting. You kind of gave you kind of alluded already that the institutions kind of um aren't as long as you think they potentially could be, although I've seen manager surveys that indicate they're they're now on the chase. Give me a sense of of of what you're getting back in terms of feedback from each of those cohorts. >> I would say I mean the biggest push back we had in the last month was us taking on finally taking on a long position in the Russell 2000. I mean that uh didn't seem to me it's not only just what it was in terms of client feedback saying ah it's you know this is a dog there's the lack of profit growth blah blah by the way profitless tech is one of the best factor exposures you could be long right now um so profit list actually in quad 2 uh as perverse as that sounds is one of the best places to be so is high short interest Russell has a lot of those things you know our hedge fund clients definitely didn't uh unanimously agree with that call let's just start with that you can look at CFTC futures and options position which we do every single week um you know non-commercial and you can see the biggest net short position coming into the last month really the last two uh was indeed the Russell 2000 and there's not an inconsequential net short position like I think it's 117,000 or thereabouts net short contracts in in S&P index e- minis um etc. So, you know, there this has been a wall of worry, man. Like, you you get this push back and and feedback all the time, especially from hedge funds that have to run neutral. Um cuz it's really really hard to run neutral when the market's not neutral. That's why I don't run neutral. I mean, it's I'm not saying it's not a hard job. It's actually a way harder job to me. That's like you're shrinking the strike zone. and I'm I suck at baseball anyway, but you know, you're really shrinking the strike zone and you're and you're you're making it a lot harder on people to perform. So, I think some of that feedback is it's just getting harder in an overs supplied industry, hedge funds to generate alpha. And I don't know if that has anything to do with with the cycle or anything. And then finally uh you do get a lot of you do get a lot of push back from long onies on market structure or the flows of the machine because they they keep looking at valuation. I don't start with valuation. I don't say I don't use valuation. We use or you know valuation to augment our views but you know the flows of the machine are highly misunderstood. the the structure of the options market, the contribution of uh ODTs to daily flows. These things are like mostly where the long only community is kind of still exploring and trying to understand versus their you know what you and I would have done 20 years ago which is not look had to look at anything like that at all. >> Yeah. some of these large market neutral shops that you're talking about, they can't even afford to even look at names underneath, let's call it, you know, 10 billion market cap because they need liquidity and they need to get in and out over time. The thing about the Russell, and tell me if I'm wrong on this, it really is tied to one thing, which is rates. And when the 10-year yield moved from 4 and a half to four, effectively, shorts needed to start covering because it is the one fundamental thing that impacts um a lot of small companies is the ability to finance themselves. So, you would agree with that? >> Yeah, that and profit growth. I mean, we were short the Russell from the end of 2021 to not not a we didn't have a long or short position coming into this year uh post being shorted in into April. But so we went from no position to a long position instead of what we would routinely go to a short position. Why? To your point, rising interest rates, rising cost of capital, negative earnings, depression, like some people like to call recessions, we called a depression in Russell earnings. I mean, there was at one point year-over-year earnings at the bottom 22 into 2023, you know, Danny, were like minus 38% year-over-year earnings growth for the Russell. I mean, that that is brutal, right? So, now the Russell 2000, yes, bond yields, I agree that's one factor, but another major factor, which again aids in the bets that the the the factor that you mentioned is the rate of change of Russell earnings growth is now positive double digits with very easy comparisons. So, you know, that's almost a perfect setup for me. easy base effects or easy base effects in a former short um that people are still stuck in for the former reasons that have since turned materially the other way. It's not to say that bond yields don't bounce and the dollar goes up that everything stocks never mind the Russell's not going to correct but you know from from here on I mean into quad one you'd stay along the Russell >> Russell working its way up the hockey line so to speak. All right. So, let's talk about the the product that you offer and what so you have you have the macro show which we see you on. You have a product offering called uh um I'm elite macro. You got the call. Talk to me about all the offerings that you have and then you do conversations um which which you do from time to time. So, talk about everything. You're a busy guy. Talk about everything you do over there. So, >> yeah, those conversations we call them real conversations. I that we try to make them free because I I think one of like with all the blessings that I've had in terms of, you know, where I was put, like I said, in the game, you know, God willing, I stay in the game on the right side of the grass here. But I mean, like I like to I like to educate or at least try. Uh so those real conversations are free. People can go to hedgeitv.com and see the whole archive of those. But yeah, really our product offering follows my my my process, right? Like so again, if you want to if you want to wake up and get a summary of a pre-market setup across all of macro, you watch the macro show. If you want to watch uh an entire research team and me running the research team for an hour, that's what the call is. You can you can basically watch our morning meeting. And that's all essentially taking the top down views and tying them to stock picks. So for people who only want to, you know, pick stocks, that might be what they do, right? Um and then and then as we get like in terms of like the bigger products like macro pro or like the higher price products, it just gives you everything. It's it's more of like a full access point. What we find is that you know people will pick and choose what you know what interests them. Real-time alerts, for example, are intraday market co, you know, thoughts, obviously, long short signals, you know, what I call coaching notes. Um, what I see kind of in-game like, so, for example, when I'm done with this, my trades into the close, I mean, I'm going to fade a weak close because now people are trying to hedge an event that I don't think really needs much hedging until determined otherwise. So, you know, I'll have some buy signals. I'll say this is why, you know, this is my volatility signal heading into it. So, that's very short-term and that's why sometime sometimes people paint me as very short-term, which is fine. I'll I'll take any paint, any color, as long as you're paying attention. But the, you know, the the intermediate to long-term views, the macro pro subscription, the Elite Pro subscription that you mentioned, thank you for mentioning those. that those get you access to our quarterly and mid-carter update calls where we'll drop 100 to 150 slide deck of of macro content with all the positions uh which include like I I'll go around max u 30 positions in my long only book in terms of ETFs and that's another product portfolio solutions that that now I show like I said at the outset of our conversation every single day I show every move that I make in portfolio solutions that would include new positions removed position positions, positions that I add or subtract. >> So, we're on the eve of the Fed here. When this comes out, it'll be it'll be the morning of the Fed, so this is still preed. Um, I know you're expecting potentially a little sell on the news because from a dovish versus hawkish perspective, it's hard to get more dovish than, you know, what is it? 70 high7s% chance of three cuts. Basically, cut at each of the next three meetings for the rest of the year. So, the language is the one thing that people can look at and the dot plot, whatever that's worth. So, are you a little cautious? I know you don't try to time it on a daily basis, but with option expiration happening, a massive o option expiration happening on Friday, feels like we might have next week might be the time where something could kind of show its head. >> Yeah. Anytime I mean anytime the NASDAQ goes up for nine straight days, you should be, you know, in caution mode. I don't care if uh what the catalyst is. In this case, it's it's the mother of all catalysts, right? So, you have, you know, big time um you know, big- time political pressure. were in the max pressure zone for Pal against who I call pump or Trump. I mean, so you got you pump wants more pump and pal most likely is going to say, "Wow, the inflation data went back up once we get that data." But we don't get that data till after this Fed meeting. So, you know, because we have an inflation now. That's one of the most valuable things we publish that comes out weekly. Um, that's part of the macro pro subscription, different subscriptions that you mentioned. Um, so I I think that there are multiple, you know, steps to get there. Uh, but overbought is as overbought does. It's not it's not a it's not a hard concept to understand. You know, gold's made so many all-time highs I can't even count them. At least with the NASDAQ, I can count them. Um, but so yes, at some point bond yields are going to bounce, the dollar is going to bounce, and you're going to get a counter trend, what we call counter trend bounce and everything that people that missed it eventually chased at the specific point where you should be trimming or booking some gains. So, let's talk about your research offering because not to get lost in all this macro, you have a great um lineup of analysts that bring ideas obviously to the forefront. And I would imagine when they line up with when you're talking about, you know, switching from being short rustled to long, when one of your analysts has a small cap name with incredible fundamentals uh and a buy rating, I would imagine that's when the two kind of marry together. Is that accurate? And talk about some of the kind of the analysts that you've brought on that do have a pretty good following on the street. >> Yeah, bingo. Like I like I said, I'm blessed with my teammates. I mean, I couldn't do this uh with the accuracy that we do or or the precision in terms of modeling and having views on single stocks obviously without analysts that know what they're doing uh and grinding it out every day. So, you know, my favorite product on that is called signal strength stocks because I basically think about it this way, Danny. I basically take all their tickers, throw them into the machine, and the machine with my again my my my my machine just basically throws out what are the bullish trends and what are the bearish trends. So if an analyst says I really like this small midcap idea and my signal doesn't, I just throw it up or I put it on the side and redo it, you know, when I redo the tickers the next day. Um, so that's a it's a very powerful tool. What you find is that the quantimental view is much more powerful in terms of its alpha generation and its accuracy than my former self which would just I was just like a stock picker on the buy side. Um so now we got both and when you make a to your point a quad shift and you get into small and midcaps we went from I think we went from like 50 to almost 100 sig signal strength long ideas that I would buy that come out of my analyst team and I think that's a new record. So that in and of itself was a huge signal because that that was like double the shorts uh in terms of what the machine was actually signaling internally from our own team's research perspective. So yeah, I go through it every morning on the call with these guys. When something is, you know, oversold or overbought, we'll address it. We try to make that actionable. Uh and you probably see that in real time alerts throughout the day as well. >> The hedge machine. All right, before we get out of here, you're not just a pretty face. Um, talk about Hedgei Cares because you guys have done a ton within the community. I know it's a passion of yours. Talk about that a little bit because I think that gets lost in in all the stuff that that goes on on Wall Street. >> Well, thanks. We have our actually we have our um uh charity golf outing uh next week. We actually put up for the first time we finally, you know, came up with the genius idea to make our charity auction online so people who don't live around us could uh could contribute if they wanted to. But, you know, for us it's like like let's give back to our community. I mean, it's hard for me to live in Westport, Connecticut, and not see Bridgeport, Connecticut, if I choose to have my hedge eyes open, right? Like, so, you know, that the Bridgeport Kuribbe, you know, youth league, that's that's a big one for us that we've sponsored and supported for many years now. That's again providing, you know, basic things that people like us, you know, take for granted with our kids. I mean, I coach kids in a in a what is becoming a rich kid sport, hockey, unfortunately. Um, you know, a lot of these kids like whether it be their just their their basketball shoes, you know, the cheerleading outfits, you know, stuff like SAT training, you know, if they are a good athlete, they have no resources. Those are the kinds of things that we're super interested in supporting and going directly to it because we know we can have a direct impact in our own community. So, that's um that's big for us and and we appreciate any any kind of support anybody wants to have alongside us. >> Well, that's great, Keith. Then people find you on um hedgei.com or maybe you tell us exactly where they can find. Is that is that accurate? They type in hedgei and they can find all the product offerings. >> Yeah, I have a lot of issues, but finding me shouldn't be that hard. >> Exactly. Well, Keith, I really appreciate you uh coming on the tape. I hope to have you back again. Uh we'll follow all the quads. People out there should follow you at the very least. If they don't want to pay for product, they certainly can get access to you like you said through the videos and then on X and various places. But, uh, it's great to have a voice like yours out there that has the experience and so looking forward to having you back on the tape. >> Thanks. Appreciate it, Dad. >> All right, NFL week three coming off an 0 and2 week, which brings my record to two and three on the season. I thought Russell Wilson would stink. He didn't. Giants still lost, but they covered and shame on me for taking the Jets again. I'm spending way too much time with Vincent Daniel. Um, the season feels like every game is right on the number and it's come down to the last second type plays. So Eagles look to be the best team I think in the NFC. The Rams visit them. They're on the road for a second straight week. It appears they beat a bad Houston team, bad Titans team. I'm talking about the Rams, so hard to give them credit for that. Eagles look really good and complete. Give me the Eagles minus three. Chargers look for real. Uh last night they beat the Raiders in Las Vegas. They're hosting the Broncos who I like, but they just seem out of sorts. So Chargers look more complete. I would take them at home. It's their first home game, by the way. They played in Brazil and then they obviously uh played on the road last night in Las Vegas. So give me um the Chargers and lay the two and a half. And lastly, I'm going back to the Well, I'm taking Dallas getting one and a half in Chicago. Chicago defense looks awful. I think the Cowboys will expose them and I think they're going to use the momentum from their overtime win against the Giants uh from last week when they go on the road here. So Dallas, the Chargers, and the Eagles are my three picks for the week. I'm looking to bounce back. Thanks for listening to the On the Tape podcast with Danny Moses. If you like what you heard, please subscribe on either Apple or Spotify to the weekly podcast and please leave a rating and review, positive only. You can also watch on the on the tape channel on YouTube and give us a thumbs up there as