Fed War, World Chaos: Top 3 Assets For 2026 Mania | Keith McCullough
Summary
Macro Regime: The guest is bullish on a Quad 1 “Goldilocks” setup with slowing inflation and accelerating real growth, arguing investors are not bullish enough.
Precious Metals: Strong, sustained long positioning across gold, silver, platinum, and palladium with a trade-around-the-range approach and expectations for higher highs.
Lithium & Base Metals: Lithium’s sharp rebound (about 60% in a month) and copper are core longs tied to global Quad 1/2 demand and mean-reversion dynamics.
International/Emerging Markets: Positive on select countries (e.g., Mexico, Turkey, Israel) amid Europe/China shifts to Quad 2 and improving India, with FX context including yen weakness.
Small Caps Preference: Favors the Russell 2000 and micro caps over the S&P 500, buying dips and rotating toward risk-on segments rather than defending broken momentum.
Healthcare Positioning: Long healthcare broadly (notes XLV) and a differentiated “Pink Panther” approach blending cyclicals, highlighting a successful rotation from prior shorts.
Financials Stance: Buying regional banks on weakness while avoiding credit-card-exposed names (e.g., JPM, V, MA, COF) when momentum breaks; stresses owning what’s working.
Portfolio Process: Emphasizes quant signals, defined max/min position sizes, and trading around risk ranges (TRR/LRR) rather than fixed narratives.
Transcript
I don't think people are bullish enough. You want to own momentum that's working. That means your account go up, right? It took me a long time to figure that out. Uh I want to buy the thing that's correcting that is signaling higher highs, preferably higher all-time highs. Could the world be better without the Federal Reserve in its current structure? Could be better without NATO. Uh I don't know about NATO, but I could definitely say yes to that on the Federal Reserve. We're we're essentially long um nine different metals, precious to base. You know, we're along everything from >> Keith McCulla joins us once more. He's the CEO and founder of Hedge Eye. We're going to talk about exactly how to manage your portfolio in today's very tumultuous environment. We don't even know which countries will be around by next week. So, we'll find out how to manage our investments in this world. This video is brought to you by Koshi. It's a fully regulated platform that lets you trade on realworld events from economic data to political outcomes. Sign up and use my code lin link in the description or scan the QR code here. And new users will get $10 on their first $100 deposit. Traders can put money down on their favorite teams, advance elections, and more in all 50 states, including California and Texas in over 140 countries. More on that later, Keith. Happy New Year. What a world we live in. What a start to the year. Welcome back. >> Happy New Year to all my favorite Canadians, David. Thank you for having me on. I appreciate it. Happy uh yeah, favorite Canadians, favorite Americans, favorite people around the world. Let's talk about the world first. What kind of a world are we living in right now, Keith? Why are we talking about the US next annexing Greenland, possibly annexing Canada, which we'll talk about soon? >> Uh you know, your your firm there there's there's there's two branches to your firm. There's risk management, there's asset management, both of which we'll talk about. We'll talk about some of your new ETF offerings as well. Very exciting. Congratulations on that. But just on the risk, how do we risk manage this current environment? What is happening? >> I think the the number one thing you should do in risk managing like the media is just to completely ignore it. Turn it off. You know, focus on numbers, not narratives cuz that's the big opportunity. You'll on the one hand see mainstream media talking about selling America. You'll you'll see on the other hand if you're in Canada about, you know, potentially selling Canada maybe. I mean the fact of the matter is that markets have continued much much higher much faster than most people have thought. I don't think people are bullish enough. We talk about a what we call a quad one goldilocks environment. Quad one being when inflation's slowing and real economic growth is accelerating. So we have the four quads as you know in our framework and goldilocks is the most exciting one because that's where all the fun stuff works. Everything from you know base and precious metals to small cap stocks. So there's a lot going on. I I haven't had this many long ideas in a long time. It's not new as of obviously today. Uh but I think the the days to take advantage of that or to have your buying opportunities are in days when people are having their what I call uniquely American, you know, panic attacks or political attacks or geopolitical concerns. You know, it's not to say that those things don't matter. I mean, we're the only firm that's called every stock market crash since 2008. So, I think I'm pretty adept at, you know, seeing some risks when they develop and and we have some shorts on, too. It's just that I think there are many more longs, uh, and and buying opportunities. >> Well, the fact that the S&P is almost at 7,000 points, I guess, speaks also to your point about how the markets don't really care about what's going on, but ultimately, are you prepared as an investor to be long war? In other words, do you see more geopolitical hotspots actually translating into kinetic wars like what we saw in Venezuela, but just on a larger scale? And are you positioned for that? >> Yeah, I mean, we're we're essentially long um I mean, when you're long nine different metals, precious to base, you know, we're long everything from lithium to copper. I mean, you know, some would argue, and I don't need a narrative to support it, but some would argue that a lot of these wars have to do with, you know, with with resources or the safety of resources or the nationalization of resources. You know, we have that like I have 30 positions in my long only account that I show every day. Uh, nine of those are metals. Yes, they include the precious metals, which also um do do fine when you see geopolitical risk rising. Obviously, silver at 85 bucks today is not uh saying no to that. So, I'm long gold, I'm long silver, I'm long platinum, I'm long palladium, uh I'm long copper, I'm long lithium. I mean, the list goes on and on. But on the same token, I think people really uh underappreciate that during the wars that we actually had, in particular, um the European war, that global industrial production growth went into a recession. So a lot of these things, you know, whether it be China coming out of a recession or Europe coming out of very low growth or the US industrial base coming out of its recession. I mean, those have been huge buying opportunities. So, um, again, I don't think that I would never use war as a one- factor model to start with. Anyway, >> well, uh, I want to get your take on this. We're both Canadian. Uh, what's this is from Koshia prediction market. This is a trade. What will be the 51st state in Trump's turn? Greenland 9% now. Puerto Rico 6%. Canada surprisingly low. I don't know why surprisingly, but only 3%. It's not zero. It's it's a nonzero probability. But I haven't met, >> you know, I just had a a very good conversation with who I'm sure you know and you've probably had her on your show. If you haven't, you should. Uh Dr. Pipa Malgren, who's phenomenal. And um she just gave like she she gave on Hedgei TV. We have a thing called Real Conversations, which I should have you on, man. We could turn the tables. But the um you know she just gave us like again Greenland is a national security play. It's a resource play. You know there are real reasons you know away from people just saying that Trump is clowning people uh to actually engage in that thought. So on the other hand you know you have Canadians are like WTF man like are these guys completely out to lunch? You know like you see you know there there are levels of pissed off that Canadians can have when they're told they're going to be the 51st state. And I I certainly uh would have some of those levels. Uh I think we'll just like leave it to to who wins between Canada and the USA and the Olympic hockey match that's coming up. Look, okay, so the levels of pissed off aside, does it make sense like geopolitically >> for America to pursue Canada as a territory? Like does that when when you think about why they want Greenland, when you think about why they want South America to be a sphere of influence, when you think about the Monroe Doctrine, which is now called the Dunro doctrine by the media and you think about why Donald Trump wants the entire Western Hemisphere to be under the US sphere of influence. Does it kind of you tap into his mind? Does he think about Canada actually seriously? You think >> you know the prime minister said this weekend to a group of Canadian businessmen, he was a private meeting. He said um that your wish for Canada to be the 51st state is a quote real thing. Is it a real thing? Yeah, it is. I think Canada would be much better off being a 51st state because we lose $200 billion a year with Canada and I'm not going to let that happen. It's too much. Why are we paying $200 billion a year essentially in subsidy to Canada now? If they're a 51st state, I don't mind doing it. >> Yeah. I mean, cuz he doesn't read books or anything. I mean he he looks at p pictures and when you look on a map I mean it looks like if you're playing Monopoly Canada from a natural resource perspective looks like Park Avenue and Broadway. I mean there's no there's no question that one can dream that up in their mind but the idea that Canada is going to be the 51st state I think is just an idea trigger certain people people who actually don't even know where the map is think it's a pretty funny and cool idea. I'm not going to pick on people in different parts of America, but obviously um you don't a a lot of people uh don't require to have much wisdom uh to agree with what um anything that any I call him pump, but anything that that Trump has to say. Uh I've seen reports that they're mobilizing troops. The US is mobilizing troops along the border of Mexico currently as we speak. So we'll see what happens next with South America. My question is, Keith, um, do you think NATO is at risk of disbanding? >> Uh, I have no idea. I mean, it maybe that's a good idea. I mean, a lot of the establishment, if I just take, you know, cuz that question I I I directly have no edge on that, nor would I ever purport to, but I do think that just challenging the establishment, you know, globally, challenging the elites and the structures that they've created post World War II, uh, that is absolutely a forth turning thing. You know, we have an ETF for that now called the fourth turning ETF, um, which many of you would probably recognize as Neil How's book. He's written two books along those lines. One's called The Fourth Turning is Here. You know, these things are demographic things. There are time and space things. There are lack of societal trust things. You know, there are so many different components to what's going on in the world right now that I think you have to really say, hey, could the world be better without the Federal Reserve in its current structure? Could be better without NATO. Uh I don't know about NATO, but I could definitely say yes to that on the Federal Reserve. >> Yeah, let's talk about the Federal Reserve. you uh there's another war going on that's between the Fed and President Trump. So, you tweeted this the other day. Meanwhile, old walls MSM can't even print all the words alltime highs as news. I see. I see what you mean. >> They even put the red glasses on, pal. Like, it's red. It's bad. It's it's it's what Mike Bloomberg needs and wants it to be. Like, it's not Mike. you know, we're paying you a lot of money for these Bloomberg terminals. I have many, many of them, you know, like, so they're super expensive, but you know, clickbait society isn't that difficult to comprehend. I mean, you know, everyone's trying to get paid. And if you're looking for that as the news, you're you look as the green arrow that I drew to, which is the all-time high in the S&P. The S&P has been up six out of seven days. Uh, a lot of people thought that it could or should be down based on these types of headlines, and it wasn't. So, get over it. get on to the next play. It's not your account. Betting that way is not making you money. >> So, there's no market relevance. And I think you've seen the video of uh Jerome Pow issuing a statement. Uh we can play it once very quickly for the audience here. >> Good evening. On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings. I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve, is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role. The Feds, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation. I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people. Thank you. >> He was issuing a statement basically saying, "Look, Trump, well, not Trump, but the DOJ has issued a grand jury subpoena because I haven't really lowered the rates because I haven't lowered the rates per what Trump has wanted me to do." Yeah. Well, of course he's going to say that. I mean, you I I I think in this case, Powell was playing, you know, checkers and and and Bessant was really playing chess and and and Pump was just like delivering the message. He's like, Scott Besson, who gets our our inflation outcast knows that the inflation number was going to continue to decline, which it did this morning. They did it the day before that report. Now he's going to be at the Economics Club of New York. you know, Trump is and he's going to talk about how inflation continues to fall and how Pal doesn't get it. Um, so he's blaming me because he doesn't get it on inflation falling. We actually, this is like one of our top three themes embedded in quad one goldilocks. Like we have the street low, David, on CPI. We have, you know, Wall Street's way too high and therefore the Fed is way too high on their inflation uh forecast for 2026. And in the first half of the year, we have inflation dropping towards 2.25%. the street's still at like three, you know, for the second quarter. That's way too high. And again, I think, you know, Pal playing checkers doesn't understand what what Trump's really trying to do is he's going to clown him. He's going to put a white construction hat on his head and he's going to say, "Fly, you just spent $2.5 billion dollars on a building for a bureaucracy that nobody trusts." I mean, that's that's what he's really doing. And Pal doesn't get it. You know, pal calls his academic buddies. By the way, the Canadian guy was uh not surprisingly quick to sign up. He's like, "Oh, but my pal, oh my my my central banking friends in in Canada and you know, the governor of the bank of you of this and of that have my back." It's like, "No Sherlock. I mean, they all have your back. You guys are all paid by the same elitist, you know, you know, I could use different words, but you they're completely tonedeaf, I think. and Trump is taking advantage of it ahead of the midterms. I guess the final point on this would be he's got a lot of different things he's saying to the people. 50% of you aren't going to have to pay taxes. I'm going to change what you know what the codes are on private equity being able to buy housing. I'm going to reduce your credit card, you know, I'm not I don't even like Trump. I'm just saying that as a capitalist, you know, or as a human being, you're starting to like these practical things that they're putting on the table. Meanwhile, Powell thinks it's about him. Well, can you just evaluate the US economy? Maybe Trump has managed to boom the economy. I mean, was it 4% real GDP growth last quarter? Pretty impressive on the surface. Yeah. I mean, we have our we have a GDP now cast that's very accurate. We have it running back, you know, we call it running the economy hot on purpose, obviously. So, and that's part of the Scott Bessant plan like go after Venezuela, lower gas prices, you know, that's part of his, you know, three arrows is to get, you know, gas prices down. And you know the only thing he hasn't been able to do is reduce the deficit obviously. So one way to do that is to grow out of it. And you know we definitely have we're higher than Wall Street on real GDP growth. You know we're at 3% for year-over-year for the upcoming quarter. That's another acceleration. You're talking about the headline quarter over quarter sequential which is four. Um but most importantly you have inflation falling and an incoming Federal Reserve head who's going to cut rates uh much more than the street thinks. you know, or he wouldn't get the job. >> Uh so let's take a look at uh one of your macro week summaries um from I think last week. So this one here uh let's just start with your dashboard. Monthly quad one growth up inflation down quarterly quad one growth one inflation down. And then you got quad 2 for global. >> So uh walk us through uh what this means and the implications for the dollar specifically which is what's highlighted in this report. Yeah, that my team did a really good job just like creating visuals for all of the numbers that we crunch every single day. We modeled 50 different countries around the world. You mentioned Mexico. We're along that, too. Uh oh, you're you're concerned about Mexico. Meanwhile, hedgeis long Mexico. Uh EW EW, we're along Turkey. We're along Israel has actually been a phenomenal stock market as well. So each company, each country is like a company. You know, they have one of four economic scenarios they're in. The world's going into quad 2 mainly because of the heavy weights that are Europe and China going into quad 2. So you have USA and Goldilocks quad one. Inflation slowing, economic growth reacelerating ahead of the midterms. Lots of goodies coming or at least perceived to be goodies which are one and the same thing from a sentiment perspective. And like I said, you have China coming out a terrible like we were short China last year. We're not shorted anymore. Um India's coming out of a growth slowdown too. There are plenty of places in the world that are large with lots of people uh that couldn't care less about Jerome Pal and his white construction hat. >> Okay, the the uh the dollar. Let's just talk about the US dollar with current expansionary I guess ambitions from the uh president's office. What uh what does that mean for the dollar? Are we are we going to continue to see dollar flows or outflows like what we saw on liberation day uh April 2025? I mean you're seeing the real money flow is in M2 growth like money supply growth is going up. Um so but that's a worldwide thing. So when you when you look at the dollar it's a very interesting scenario where it too for now is signaling and again I reserve the enal right to change my my mind when my signals do but the the dollar is signaling nothingness and what that's signaling really is that the rest of the world's doing the same thing. I mean, if there is one big signal, it's that the yen continues to deteriorate against the dollar. So, that provides dollar strength. Cuz when you talk about the dollar, you're either talking about the dollar against the euro and against the yen in particular, maybe the pound. And if we go to Vancouver and and hang out um at your place, and we'll we'll include the Canadian dollar and others. Uh but but but you have to get the other currencies right as well. I mean, in Japan in particular, they have Takayichi who's in. She just called the snap election. You know, we're short the yen against the dollar. She has every uh again every intention of behaving Japanese. You know, have you have the macro tourists out there who all thought the Japanese government bond yields breaking out to the upside thought a little bit about why the N is going down in a ball of flames? It's cuz the next move for Japanese government bond yields is for them to go down and for them to print money like they always do. >> Well, uh you have uh let's take a look at the uh going back to the US economy. we have here 50,000 jobs added uh in December changed a little and um it's not a big number. How does this how do you reconcile a slowing or I guess a weak labor market not really collapsing but just kind of chugging along sideways versus your progrowth quad one outlook. >> Yeah, we just call that Goldilocks like you said. It's not it's not really slowing. It's definitely not accelerating. It's just about right for the Fed to stay doubbish. that and again that's all that's all I need. I mean it's a perverse thing to say for a guy from Thunder Bay, Ontario that um you know that the that the people could be in like a kind of meandering place from a jobs market perspective. Young people, it's terrible actually to get try to get a job if you're a young person right now is becoming increasingly difficult. I don't want to go down the rabbit hole on AI's impact on that. But really what I care about is really at doing nothing. Nothing is Goldilocks. That means the Fed stays dovish as real consumption growth uh continues to accelerate anyway. You don't have to have, you know, a raging u acceleration in the jobs market to have consumption growth go up. >> All right. Well, let's move on to some sectors and assets here. Starting with precious metals. This is what you tweeted. Uh if you like gold, you'll love the other four ETF metal assets. Metals asset allocations were long that are beating it in the month in the last month. Silver ripping to a new all-time high. Silver is just killing it right What? What is What is the silver price? I >> moves every day. I'm 85. Yeah, it's crazy. >> Um 86 now. You see it's moving every single hour. Um and all >> and it's like the people calling for triple digit silver cuz I've been in this business for a couple couple years now. I remember back in 2020, people have been telling me triple digit silver. They were labeled as, you know, a little bit little bit eccentric. Let's put it that way. But that that's $14 off. It's like it could happen next week. I'm not saying it well, but at this point it's like, okay, well that's not even that big of a move anymore. Um, so tell us about your metals metals asset allocation strategy overall and how the precious metals gold and silver currently fit into your asset allocation because they are quite expensive relative to where they were just a year before. Yeah. And I I think everyone's position starts with where they put it on, right? So I bought the living daylights out of gold in February of last year when it was a lot lower. I bought silver in May. Uh I then added platinum and palladium. My my, you know, I my price target for all these things is higher, right? That's it. Like I think you have to be a certified idiot to put a number on there to your point that could get like on any given week from now. That doesn't make any sense. If you're going to have, which we did have as an initial price target for silver when we bought it in May, all-time highs, that was the price target. It's going to go through where it was in the 1980s. That's why we actually like platinum and platium. You have to go back uh on on platinum in particular to 2008 I believe where it got up to 2290. So you can look at platinum today, it's not it's nowhere near 2290. Or if you look at palladium, for example, it peaked in 2020 at around 3,400 bucks, you know. So, you know, those two are the are the real, you know, that's why we've added lithium. Like these are it's called a mean reversion trade in macro where the gold and silver signals now are so to your point powerful that it creates a bid for everything that's linked to them, you know, however people think about them. So, you know, we're going to stay with that in quad one. That's where precious metals have their best runs anyway. So, it was the right setup to be and and and I like to think that, you know, my positioning. I'm not I'm not not like Nostra Mucker Damus or whatever people want to purport to be out there on Wall Street with their price targets. I've never worked, you know, for the old wall and I'm not going to start with price targets now. I think higher for now until we say that we're getting out is how we're going to deal with it. And there's no other way for me to deal with it. Lithium is on your uh matrix here and it's having a bit of a comeback since it basically collapsed a few years ago. Uh what's the narrative now with lithium? There was the there was the EV narrative and then there was over supply from China. What is it now? >> Uh my main narrative is that it's up 60% in the last month. I mean that's that's that like again you can come up with a narrative as you know for pretty much anything in life. You the thing about narratives that's the most dangerous thing in the investor mind because of course it's totally human. We as humans want certainty. You know what I embrace is uncertainty. If something goes from and I was used to be short lithium. So again I I don't I don't have a narrative on why it was why why I had to be short lithium other than it broke my intermediate term trend signal and we were actually at that point entering what we call quad 4. And that's really the time where you don't want to be long these kind call them higher beta metals is in that type or growth metals that have all these narratives attached to them. The long-term narrative is going to be there. the shorter to intermediate term riskmanagement scenario needs to be riskmanaged. So, you know, lithium, you know, there's always been a good backs stop demand case for it, but you have to be in a global quad 2 environment. So, again, global quad 1, quad 2, you showed the, you know, the hedgei dials in terms of where we're at that there's no better setup for global demand for anything. That's also why, you know, again, why we're long copper. It's not it's there's there's no differentiation, at least in my own mind. I don't wake up in the morning saying, "Oh my god, I got I'm going to talk to Lynn today. I got to come up with a better way to pitch copper than than lithium." I'm long both and happily long both. >> The fact that lithium has gone up 60% in the last month. The fact that silver is up what 160% in the last year, gold's up 70 something% in the last year. At what point do you start taking profits? Here's your here's your newsletter. You wrote uh while your team wrote, "Precious metals continue to confirm quad one with gold pressing near the TRR." Uh what does TRR stand for in this context, by the way? 4500. Yeah, TRR is is the answer to the question. So the TRR stands for the top end of the risk range. So, you know, we have a trademarked risk range signal that we publish every day. Um, so the way that, you know, I I invest is I take a a core position and then I trade around the risk range. So, let's say I had a 2% position in something like lithium and it went up to the TRR. It went to the top end of my wrist range. Then I'd sell like 50 or 100 basis points. So then, you know, if I went from a 4% from a 2% position to a 4% position, then I'm down to 3 1/2 to 3. Every time it gets to the top end of the range, I'll sell some and then when it corrects, I buy some more. But I always keep that main core position that I buy. The when on these things, when you enter these positions, there is no more important thing. Anybody who tells you that market timing doesn't work, it's cuz they can't do market timing. That's what we specialize in which F is fully loaded with the short-term uh risk range. Top end of the range, low end of the range is top end of the range TRR versus lower uh lower lower end of the risk range. LRR is of course where you buy it more aggressively. >> Um how what do you think of uh some institutional managers strategies of maintaining a certain weight within their portfolio. Let's say they have a 5% waiting to gold. Gold goes up, you know, 70% this year. It's going to blow past their 5% waiting. So they sell enough just to maintain their 5%. Do you do that? >> Yeah. Yeah. Mine's 12. I mean, so for gold, because I gold is a currency, not a metal. Uh I can take a much bigger position. My max position in a commodity like lithium is 4%. Bitcoin, we're long that finally. Uh after being shorted, you know, the max for a commodity, which Bitcoin we call commodities, 4%, but max for gold, which is a currency, is 12. So, you know, so so that's we define I think that's we could get into a whole other discussion about this. I think it's I think it's something that most human beings that dabble in markets are are actually doing just that. They're dabbling. They don't have a plan on what their minimum and maximum position sizes are. They don't have a plan on how they touch it at the top end of the range, the bottom end of the range. We provide an entire, you know, solution for that. That's what the process is essentially. Uh overall then how often do you not just for gold but for any asset in your portfolio? How often do you change the waiting of that particular asset in your portfolio? a year, let's say >> change. Well, we never change what the minimum and the max are. We only change the waiting when again we'll reduce when we're at the top end of the range and we'll buy more when we're at the low end of the range. So, you're always moving within like for Bitcoin, for example, I'd never be bigger than four. I'm long Bitcoin, Ethereum, Avalanche. So, if I go max in all three of those, I'd have a 12% position, which would be four times three, right? So, um, the the beauty of this market, you know, David, is that you can rotate your hard-earned capital every single day into something that's actually going down. You know, you have there were major buying opportunities in the precious metals only 2 weeks ago. So, you know, you can you can sell some something of something that's working, reallocate. So, that's how I do it. I understand other people do it different ways, but I I have enough problems and my hair goes gray enough trying to execute on my own process. uh sectors now US sectors you've made some changes here uh sector style rotation continues to confirm quad one active rebalancing of signals evolve we removed our consumer discretionary long added a short in consumer staples this week and uh you have standing positions in industrials and utilities so you're short staples and you removed discretionary that >> and and we're short utilities yes >> that may seem contradictory on the surface can you explain that you're short a defensive sector but you also removed a cyclical sector. >> Yeah, I rem I just I just exchanged it for uh actually airline stocks which are jets. >> So the ETF is Jets and today today I was actually buying regional banks KRE because the banks are weak with JP Morgan but you know just replacing the main problem I had with XLY is that it has Tesla in it and Tesla is no longer signaling you know what I call signal strength. So it's such a heavy weight inside of the ETFs. This is essentially why I started my own ETF business. I don't like the construction of the ETFs that I have to buy. Um, so let's just launch our own, right? I mean, um, but the main point is we're short staples as small cap staples, PSC, and we're short utilities. Utilities is the only sector in the S&P I think that's down this year. We're only eight days, you know, eight trading days into the year, but again, it's been an alpha position for us. uh XLU utilities has been u whether you're long consumer cyclicals or classic cyclicals like in industrials we'd be long both >> the pink panther the quiet setup behind healthc care's breakout uh what is the uh uh what is the uh relationship to the the the metaphor here behind the behind this the why why is it called the pink panther here tell us about healthcare >> well because it's not healthcare the way Wall Street designs their healthcare ETF so we call it the pink panther Yeah, most people if you look at the Pink Panther, you'd prefer the Pink Panther than the XLV. We're we're actually long the XLV as well. Healthcare is an interesting one because healthcare last year, we started the year short it we actually started the year making a big call that that the stock market would crash in the first part of the year. It did. U then we started to rotate into sectors. Initially we didn't buy cyclicals. We actually bought the Pink Panther and we bought healthcare uh broadly and that was an excellent move uh because most people had at that point healthcare was just a dog and they got rid of it. Now now we're long it Michael Taylor who runs the Pink Panther or the Pink ETF um has been awesome. Uh there are stocks in there that aren't even healthcare stocks. They're actually cyclical stocks. So you get a bit of a kicker there. And uh you know I I I like Mike T. I think he likes when we make nice posts like that with the pink panther on. >> Well, um, do you think that, okay, just going back to banks for a minute, by the way, you read the story last Friday, Trump announced that he wants to cap credit card interest rates to 10%. Hasn't been enacted yet, but he wants to do that this year. But yet, and banks fell a lot, a lot most banks fell a lot in the news, but yet you're you're buying banks on the dip. You don't think that's going to happen where it affect their profitability? >> Yeah. On on to be clear, I'm buying regional banks, right? KR's regional banks. Um and and and yeah, the I would never underestimate, you know, the consistency that Trump will say the same thing over and over again. I mean, whether or not it's valid, it's intellectually correct. Like, I don't care. I'm not an intellect. Uh I think most people can tell. Um and again, it doesn't have to be right in my mind cuz I don't have a political mind. I I'm I always say I'm a like I'm not a Democrat. I'm not a Republican. I'm a Canadian. and I'm going to buy whatever is signaling buy and those regional banks um keep me away from being long some like we're not long like a credit card ETF or anything like that. >> Okay. Uh well, what do you think about the bigger banks though? Capital 1 dropped 6%. Uh JP Morgan down 4%, Cityroup, no. Uh yeah, Cityroup down 4%. JP Morgan, Bank of America fell 2%. Uh I mean not not huge moves, but credit card businesses aren't the only line of businesses, you know. So we we we have this ongoing thing happening. Do you do you see financials recovering from this or are there are there other headwinds uh that that that may push the chairs down even more? What do you think? >> Yeah, JP Morgan's an interesting one, right? Because they just took they they now, you know, even have the the Apple business, I believe, the Apple car business that Goldman screwed up or whatever. But I mean the um I would I'd stay away from that. I mean, when momentum turns in this market, you better accept it as the new reality and move on to the next play. I mean, you know, Visa broke, Mastercard broke, JP Morgan for now looks like it's hanging in on my trend signal, but it broke what we call immediate term trade support. So, that wouldn't be something incrementally we're buying. What you want to do, and it and it drives the valueoriented people nuts. You want to own momentum that's working. That means your account go up, right? It took me a long time to figure that out. uh like 25 years because again in our minds we want to be right. We want to be buying the thing that's down. No, no, no, no. I want to buy the thing that's correcting that is signaling higher highs, preferably higher all-time highs. And now all those credit card stocks that you mentioned, they're not signaling that. So, I would just stay away. >> Any other uh sectors or assets that you are really bullish on this year that we haven't discussed yet? >> Yeah, I like I like themes like space. um space quantum we're still we're less bullish on quantum than we are on space like the the ETF we've had a lot of success with is is called UFO um so again another another topic that we've been on top of I think that the a big theme will be the bag seven against like things like that you know there there are huge themes here to be capitalizing on defense spending obviously precious metals resource scarcity you know robotics space so When you look at, you know, some of the bearish trend signals that we have, I call them the bag seven because half of them are bag holding stocks right now, like they're not making any money. You know, Meta and Microsoft, which we we have as bearish trend signals. Those have been bloody awful stocks. Netflix has been worse. Um, so like there are a whole bunch of stocks that that a lot of the people own because they work for so long. I get into the organic growers and or well and not and or and a a blended portfolio of cyclical growers like we're along everything from like JB Hunt to Cat Tractor to HII Huntington which is a defense contractor. So you know there I I think that I mean our in our ETFs you can see this where we have much different blends than the the the people who want to be famous on CNBC in our ETFs. >> Yeah. Well, tell us about uh this new ETF that you just launched. >> Um, which one? >> I think there's a few. >> Yeah, we la I mean, so we launched Neil House's um uh fourth turning ETF. The ticker on that >> hand the one that you wanted. Yeah, >> heft heft forth turning like this is so if you're really if you think the world's going to end, there is a component in there for that. Uh for example, it's long precious metals. It's got plenty of uh defense stocks in particular. If you look inside you obviously ETFs you can look at the holdings at the close every day. So um I think one of the more interesting ones is hedge long short eight like it's called hells h e ls um because I I don't I don't see any competition for us on the short side. I mean certainly looking back to 2008 um so stock picking on the short side matters. There aren't many ETFs that do that. If there are a couple um bare ETFs, I'm actually short them. HDE and Dorsey Wrights ETFs, DWSH, we're short both of those. Um so we have those. We have those two. We have David Salem's uh hedgei asset allocation uh ETF that took her on that. He's been phenomenal. Um again, the the performance on these things I can't talk about. They should speak for themselves. And then there's Sam Ramen who's competing with like a Kathy Wood competitor. For us, it's called HGrow. So, quality growers, what you'll find in that one is not just the go- go stuff. You're going to see cyclical stocks in there, for example, uh and and stocks that maybe not everybody talks about on on Old Wall TV every day. >> Okay, great. Uh well, congrats again on all these launches and uh you've been definitely correct on a lot of your calls, including precious metals. So, uh great start to 2026. A volatile year so far, but not so much for the markets. So, overall then, let's close off the conversation. Overall, given your Quad 1 progrowth outlook, you don't see the S&P deviating too much from 7,000 points, at least to the downside. Is that fair to assume? That that's fair to assume. And if you want that risk manage, we have an ETF for that as well. It's called Ky. It's a It's a hedged S&P 500 product that competes with JP Morgan's, you know, well-known JP hedge product. And you can look at the performance differentials there. Uh but I I prefer the our best idea. I should have said it. Maybe it's a good one to close with. Uh is our biggest uh incremental US equity allocation last in December to get set up for this year was the Russell 2000. So we like the Russell 2000. We also like micro caps. IWC is the ticker for that. We much prefer that than the S&P. >> I'm just curious before we close off because we're both Canadian. What's your view on the TSX composite? Most of that is oil companies and resource stocks as you know had a tremendous year in 2025. I think up uh something like 35%. Um but a lot of it does depend on oil and with um you know Trump expanding its oil reserves his oil reserves to now Venezuela which is the country with the biggest oil reserves in the world uh that some analysts said could put some downside. Let's get your take. >> I I would say that the TSX looks like how Canada is going to look against team USA and Olympic hockey. Um the TS like let's just call team USA QQQ. >> Uh I'm long that but I think the TSX I mean first of all it has beaten Q's badly in the last month to two months. Uh the price momentum largely reflects that Canada owns a lot of the things back to your prior point that maybe uh Pump if he's playing a little Monopoly he'd like to own. So, you know, everybody knows that you'd like to be long of Nathan McKinnon, McDavid, and Mar over who Team USA has. Like, everybody knows that, but they'd have to live in Canada to understand that. >> All right. Okay. So, you're bullish in Canada as well. Thanks very much, Keith. Where can we uh where can we follow you and uh and your hockey predictions? Stay up. >> Those are those aren't I'm a Leafs fan, so that's that's the problem there. I'm terrible. Uh please don't follow me. Uh, but you can, you know, Keith McCulla on on Twitter. I'm up early every morning and and providing some of the stuff. We try to we try to educate a little bit for free, but um, now we have the ETFs. You can check that out too on hedgeam.com or hedgeiassetmanagement.com. >> Yeah, Keith's got a big following on X 280,000 subs followers now. Congratulations. And uh, yeah, so follow Keith there. Follow Hedgei. Links down below. Happy New Year once again. We'll we'll catch up again soon. Take care for now, Keith. >> Thanks, Dave. Appreciate it. >> Thanks for watching. Don't forget to like and subscribe and follow Keith and Hedgite. Links down below. And don't forget to use my code Lynn L I N when you sign up to Koshi. Remember, firsttime users can get $10 on their first $100 deposit when you use my code LI N Lin. Link down below or scan the QR code here.
Fed War, World Chaos: Top 3 Assets For 2026 Mania | Keith McCullough
Summary
Transcript
I don't think people are bullish enough. You want to own momentum that's working. That means your account go up, right? It took me a long time to figure that out. Uh I want to buy the thing that's correcting that is signaling higher highs, preferably higher all-time highs. Could the world be better without the Federal Reserve in its current structure? Could be better without NATO. Uh I don't know about NATO, but I could definitely say yes to that on the Federal Reserve. We're we're essentially long um nine different metals, precious to base. You know, we're along everything from >> Keith McCulla joins us once more. He's the CEO and founder of Hedge Eye. We're going to talk about exactly how to manage your portfolio in today's very tumultuous environment. We don't even know which countries will be around by next week. So, we'll find out how to manage our investments in this world. This video is brought to you by Koshi. It's a fully regulated platform that lets you trade on realworld events from economic data to political outcomes. Sign up and use my code lin link in the description or scan the QR code here. And new users will get $10 on their first $100 deposit. Traders can put money down on their favorite teams, advance elections, and more in all 50 states, including California and Texas in over 140 countries. More on that later, Keith. Happy New Year. What a world we live in. What a start to the year. Welcome back. >> Happy New Year to all my favorite Canadians, David. Thank you for having me on. I appreciate it. Happy uh yeah, favorite Canadians, favorite Americans, favorite people around the world. Let's talk about the world first. What kind of a world are we living in right now, Keith? Why are we talking about the US next annexing Greenland, possibly annexing Canada, which we'll talk about soon? >> Uh you know, your your firm there there's there's there's two branches to your firm. There's risk management, there's asset management, both of which we'll talk about. We'll talk about some of your new ETF offerings as well. Very exciting. Congratulations on that. But just on the risk, how do we risk manage this current environment? What is happening? >> I think the the number one thing you should do in risk managing like the media is just to completely ignore it. Turn it off. You know, focus on numbers, not narratives cuz that's the big opportunity. You'll on the one hand see mainstream media talking about selling America. You'll you'll see on the other hand if you're in Canada about, you know, potentially selling Canada maybe. I mean the fact of the matter is that markets have continued much much higher much faster than most people have thought. I don't think people are bullish enough. We talk about a what we call a quad one goldilocks environment. Quad one being when inflation's slowing and real economic growth is accelerating. So we have the four quads as you know in our framework and goldilocks is the most exciting one because that's where all the fun stuff works. Everything from you know base and precious metals to small cap stocks. So there's a lot going on. I I haven't had this many long ideas in a long time. It's not new as of obviously today. Uh but I think the the days to take advantage of that or to have your buying opportunities are in days when people are having their what I call uniquely American, you know, panic attacks or political attacks or geopolitical concerns. You know, it's not to say that those things don't matter. I mean, we're the only firm that's called every stock market crash since 2008. So, I think I'm pretty adept at, you know, seeing some risks when they develop and and we have some shorts on, too. It's just that I think there are many more longs, uh, and and buying opportunities. >> Well, the fact that the S&P is almost at 7,000 points, I guess, speaks also to your point about how the markets don't really care about what's going on, but ultimately, are you prepared as an investor to be long war? In other words, do you see more geopolitical hotspots actually translating into kinetic wars like what we saw in Venezuela, but just on a larger scale? And are you positioned for that? >> Yeah, I mean, we're we're essentially long um I mean, when you're long nine different metals, precious to base, you know, we're long everything from lithium to copper. I mean, you know, some would argue, and I don't need a narrative to support it, but some would argue that a lot of these wars have to do with, you know, with with resources or the safety of resources or the nationalization of resources. You know, we have that like I have 30 positions in my long only account that I show every day. Uh, nine of those are metals. Yes, they include the precious metals, which also um do do fine when you see geopolitical risk rising. Obviously, silver at 85 bucks today is not uh saying no to that. So, I'm long gold, I'm long silver, I'm long platinum, I'm long palladium, uh I'm long copper, I'm long lithium. I mean, the list goes on and on. But on the same token, I think people really uh underappreciate that during the wars that we actually had, in particular, um the European war, that global industrial production growth went into a recession. So a lot of these things, you know, whether it be China coming out of a recession or Europe coming out of very low growth or the US industrial base coming out of its recession. I mean, those have been huge buying opportunities. So, um, again, I don't think that I would never use war as a one- factor model to start with. Anyway, >> well, uh, I want to get your take on this. We're both Canadian. Uh, what's this is from Koshia prediction market. This is a trade. What will be the 51st state in Trump's turn? Greenland 9% now. Puerto Rico 6%. Canada surprisingly low. I don't know why surprisingly, but only 3%. It's not zero. It's it's a nonzero probability. But I haven't met, >> you know, I just had a a very good conversation with who I'm sure you know and you've probably had her on your show. If you haven't, you should. Uh Dr. Pipa Malgren, who's phenomenal. And um she just gave like she she gave on Hedgei TV. We have a thing called Real Conversations, which I should have you on, man. We could turn the tables. But the um you know she just gave us like again Greenland is a national security play. It's a resource play. You know there are real reasons you know away from people just saying that Trump is clowning people uh to actually engage in that thought. So on the other hand you know you have Canadians are like WTF man like are these guys completely out to lunch? You know like you see you know there there are levels of pissed off that Canadians can have when they're told they're going to be the 51st state. And I I certainly uh would have some of those levels. Uh I think we'll just like leave it to to who wins between Canada and the USA and the Olympic hockey match that's coming up. Look, okay, so the levels of pissed off aside, does it make sense like geopolitically >> for America to pursue Canada as a territory? Like does that when when you think about why they want Greenland, when you think about why they want South America to be a sphere of influence, when you think about the Monroe Doctrine, which is now called the Dunro doctrine by the media and you think about why Donald Trump wants the entire Western Hemisphere to be under the US sphere of influence. Does it kind of you tap into his mind? Does he think about Canada actually seriously? You think >> you know the prime minister said this weekend to a group of Canadian businessmen, he was a private meeting. He said um that your wish for Canada to be the 51st state is a quote real thing. Is it a real thing? Yeah, it is. I think Canada would be much better off being a 51st state because we lose $200 billion a year with Canada and I'm not going to let that happen. It's too much. Why are we paying $200 billion a year essentially in subsidy to Canada now? If they're a 51st state, I don't mind doing it. >> Yeah. I mean, cuz he doesn't read books or anything. I mean he he looks at p pictures and when you look on a map I mean it looks like if you're playing Monopoly Canada from a natural resource perspective looks like Park Avenue and Broadway. I mean there's no there's no question that one can dream that up in their mind but the idea that Canada is going to be the 51st state I think is just an idea trigger certain people people who actually don't even know where the map is think it's a pretty funny and cool idea. I'm not going to pick on people in different parts of America, but obviously um you don't a a lot of people uh don't require to have much wisdom uh to agree with what um anything that any I call him pump, but anything that that Trump has to say. Uh I've seen reports that they're mobilizing troops. The US is mobilizing troops along the border of Mexico currently as we speak. So we'll see what happens next with South America. My question is, Keith, um, do you think NATO is at risk of disbanding? >> Uh, I have no idea. I mean, it maybe that's a good idea. I mean, a lot of the establishment, if I just take, you know, cuz that question I I I directly have no edge on that, nor would I ever purport to, but I do think that just challenging the establishment, you know, globally, challenging the elites and the structures that they've created post World War II, uh, that is absolutely a forth turning thing. You know, we have an ETF for that now called the fourth turning ETF, um, which many of you would probably recognize as Neil How's book. He's written two books along those lines. One's called The Fourth Turning is Here. You know, these things are demographic things. There are time and space things. There are lack of societal trust things. You know, there are so many different components to what's going on in the world right now that I think you have to really say, hey, could the world be better without the Federal Reserve in its current structure? Could be better without NATO. Uh I don't know about NATO, but I could definitely say yes to that on the Federal Reserve. >> Yeah, let's talk about the Federal Reserve. you uh there's another war going on that's between the Fed and President Trump. So, you tweeted this the other day. Meanwhile, old walls MSM can't even print all the words alltime highs as news. I see. I see what you mean. >> They even put the red glasses on, pal. Like, it's red. It's bad. It's it's it's what Mike Bloomberg needs and wants it to be. Like, it's not Mike. you know, we're paying you a lot of money for these Bloomberg terminals. I have many, many of them, you know, like, so they're super expensive, but you know, clickbait society isn't that difficult to comprehend. I mean, you know, everyone's trying to get paid. And if you're looking for that as the news, you're you look as the green arrow that I drew to, which is the all-time high in the S&P. The S&P has been up six out of seven days. Uh, a lot of people thought that it could or should be down based on these types of headlines, and it wasn't. So, get over it. get on to the next play. It's not your account. Betting that way is not making you money. >> So, there's no market relevance. And I think you've seen the video of uh Jerome Pow issuing a statement. Uh we can play it once very quickly for the audience here. >> Good evening. On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment related to my testimony before the Senate Banking Committee last June. That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings. I have deep respect for the rule of law and for accountability in our democracy. No one, certainly not the chair of the Federal Reserve, is above the law. But this unprecedented action should be seen in the broader context of the administration's threats and ongoing pressure. This new threat is not about my testimony last June or about the renovation of the Federal Reserve buildings. It is not about Congress's oversight role. The Feds, through testimony and other public disclosures, made every effort to keep Congress informed about the renovation project. Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public rather than following the preferences of the president. This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions, or whether instead monetary policy will be directed by political pressure or intimidation. I have served at the Federal Reserve under four administrations, Republicans and Democrats alike. In every case, I have carried out my duties without political fear or favor, focused solely on our mandate of price stability and maximum employment. Public service sometimes requires standing firm in the face of threats. I will continue to do the job the Senate confirmed me to do with integrity and a commitment to serving the American people. Thank you. >> He was issuing a statement basically saying, "Look, Trump, well, not Trump, but the DOJ has issued a grand jury subpoena because I haven't really lowered the rates because I haven't lowered the rates per what Trump has wanted me to do." Yeah. Well, of course he's going to say that. I mean, you I I I think in this case, Powell was playing, you know, checkers and and and Bessant was really playing chess and and and Pump was just like delivering the message. He's like, Scott Besson, who gets our our inflation outcast knows that the inflation number was going to continue to decline, which it did this morning. They did it the day before that report. Now he's going to be at the Economics Club of New York. you know, Trump is and he's going to talk about how inflation continues to fall and how Pal doesn't get it. Um, so he's blaming me because he doesn't get it on inflation falling. We actually, this is like one of our top three themes embedded in quad one goldilocks. Like we have the street low, David, on CPI. We have, you know, Wall Street's way too high and therefore the Fed is way too high on their inflation uh forecast for 2026. And in the first half of the year, we have inflation dropping towards 2.25%. the street's still at like three, you know, for the second quarter. That's way too high. And again, I think, you know, Pal playing checkers doesn't understand what what Trump's really trying to do is he's going to clown him. He's going to put a white construction hat on his head and he's going to say, "Fly, you just spent $2.5 billion dollars on a building for a bureaucracy that nobody trusts." I mean, that's that's what he's really doing. And Pal doesn't get it. You know, pal calls his academic buddies. By the way, the Canadian guy was uh not surprisingly quick to sign up. He's like, "Oh, but my pal, oh my my my central banking friends in in Canada and you know, the governor of the bank of you of this and of that have my back." It's like, "No Sherlock. I mean, they all have your back. You guys are all paid by the same elitist, you know, you know, I could use different words, but you they're completely tonedeaf, I think. and Trump is taking advantage of it ahead of the midterms. I guess the final point on this would be he's got a lot of different things he's saying to the people. 50% of you aren't going to have to pay taxes. I'm going to change what you know what the codes are on private equity being able to buy housing. I'm going to reduce your credit card, you know, I'm not I don't even like Trump. I'm just saying that as a capitalist, you know, or as a human being, you're starting to like these practical things that they're putting on the table. Meanwhile, Powell thinks it's about him. Well, can you just evaluate the US economy? Maybe Trump has managed to boom the economy. I mean, was it 4% real GDP growth last quarter? Pretty impressive on the surface. Yeah. I mean, we have our we have a GDP now cast that's very accurate. We have it running back, you know, we call it running the economy hot on purpose, obviously. So, and that's part of the Scott Bessant plan like go after Venezuela, lower gas prices, you know, that's part of his, you know, three arrows is to get, you know, gas prices down. And you know the only thing he hasn't been able to do is reduce the deficit obviously. So one way to do that is to grow out of it. And you know we definitely have we're higher than Wall Street on real GDP growth. You know we're at 3% for year-over-year for the upcoming quarter. That's another acceleration. You're talking about the headline quarter over quarter sequential which is four. Um but most importantly you have inflation falling and an incoming Federal Reserve head who's going to cut rates uh much more than the street thinks. you know, or he wouldn't get the job. >> Uh so let's take a look at uh one of your macro week summaries um from I think last week. So this one here uh let's just start with your dashboard. Monthly quad one growth up inflation down quarterly quad one growth one inflation down. And then you got quad 2 for global. >> So uh walk us through uh what this means and the implications for the dollar specifically which is what's highlighted in this report. Yeah, that my team did a really good job just like creating visuals for all of the numbers that we crunch every single day. We modeled 50 different countries around the world. You mentioned Mexico. We're along that, too. Uh oh, you're you're concerned about Mexico. Meanwhile, hedgeis long Mexico. Uh EW EW, we're along Turkey. We're along Israel has actually been a phenomenal stock market as well. So each company, each country is like a company. You know, they have one of four economic scenarios they're in. The world's going into quad 2 mainly because of the heavy weights that are Europe and China going into quad 2. So you have USA and Goldilocks quad one. Inflation slowing, economic growth reacelerating ahead of the midterms. Lots of goodies coming or at least perceived to be goodies which are one and the same thing from a sentiment perspective. And like I said, you have China coming out a terrible like we were short China last year. We're not shorted anymore. Um India's coming out of a growth slowdown too. There are plenty of places in the world that are large with lots of people uh that couldn't care less about Jerome Pal and his white construction hat. >> Okay, the the uh the dollar. Let's just talk about the US dollar with current expansionary I guess ambitions from the uh president's office. What uh what does that mean for the dollar? Are we are we going to continue to see dollar flows or outflows like what we saw on liberation day uh April 2025? I mean you're seeing the real money flow is in M2 growth like money supply growth is going up. Um so but that's a worldwide thing. So when you when you look at the dollar it's a very interesting scenario where it too for now is signaling and again I reserve the enal right to change my my mind when my signals do but the the dollar is signaling nothingness and what that's signaling really is that the rest of the world's doing the same thing. I mean, if there is one big signal, it's that the yen continues to deteriorate against the dollar. So, that provides dollar strength. Cuz when you talk about the dollar, you're either talking about the dollar against the euro and against the yen in particular, maybe the pound. And if we go to Vancouver and and hang out um at your place, and we'll we'll include the Canadian dollar and others. Uh but but but you have to get the other currencies right as well. I mean, in Japan in particular, they have Takayichi who's in. She just called the snap election. You know, we're short the yen against the dollar. She has every uh again every intention of behaving Japanese. You know, have you have the macro tourists out there who all thought the Japanese government bond yields breaking out to the upside thought a little bit about why the N is going down in a ball of flames? It's cuz the next move for Japanese government bond yields is for them to go down and for them to print money like they always do. >> Well, uh you have uh let's take a look at the uh going back to the US economy. we have here 50,000 jobs added uh in December changed a little and um it's not a big number. How does this how do you reconcile a slowing or I guess a weak labor market not really collapsing but just kind of chugging along sideways versus your progrowth quad one outlook. >> Yeah, we just call that Goldilocks like you said. It's not it's not really slowing. It's definitely not accelerating. It's just about right for the Fed to stay doubbish. that and again that's all that's all I need. I mean it's a perverse thing to say for a guy from Thunder Bay, Ontario that um you know that the that the people could be in like a kind of meandering place from a jobs market perspective. Young people, it's terrible actually to get try to get a job if you're a young person right now is becoming increasingly difficult. I don't want to go down the rabbit hole on AI's impact on that. But really what I care about is really at doing nothing. Nothing is Goldilocks. That means the Fed stays dovish as real consumption growth uh continues to accelerate anyway. You don't have to have, you know, a raging u acceleration in the jobs market to have consumption growth go up. >> All right. Well, let's move on to some sectors and assets here. Starting with precious metals. This is what you tweeted. Uh if you like gold, you'll love the other four ETF metal assets. Metals asset allocations were long that are beating it in the month in the last month. Silver ripping to a new all-time high. Silver is just killing it right What? What is What is the silver price? I >> moves every day. I'm 85. Yeah, it's crazy. >> Um 86 now. You see it's moving every single hour. Um and all >> and it's like the people calling for triple digit silver cuz I've been in this business for a couple couple years now. I remember back in 2020, people have been telling me triple digit silver. They were labeled as, you know, a little bit little bit eccentric. Let's put it that way. But that that's $14 off. It's like it could happen next week. I'm not saying it well, but at this point it's like, okay, well that's not even that big of a move anymore. Um, so tell us about your metals metals asset allocation strategy overall and how the precious metals gold and silver currently fit into your asset allocation because they are quite expensive relative to where they were just a year before. Yeah. And I I think everyone's position starts with where they put it on, right? So I bought the living daylights out of gold in February of last year when it was a lot lower. I bought silver in May. Uh I then added platinum and palladium. My my, you know, I my price target for all these things is higher, right? That's it. Like I think you have to be a certified idiot to put a number on there to your point that could get like on any given week from now. That doesn't make any sense. If you're going to have, which we did have as an initial price target for silver when we bought it in May, all-time highs, that was the price target. It's going to go through where it was in the 1980s. That's why we actually like platinum and platium. You have to go back uh on on platinum in particular to 2008 I believe where it got up to 2290. So you can look at platinum today, it's not it's nowhere near 2290. Or if you look at palladium, for example, it peaked in 2020 at around 3,400 bucks, you know. So, you know, those two are the are the real, you know, that's why we've added lithium. Like these are it's called a mean reversion trade in macro where the gold and silver signals now are so to your point powerful that it creates a bid for everything that's linked to them, you know, however people think about them. So, you know, we're going to stay with that in quad one. That's where precious metals have their best runs anyway. So, it was the right setup to be and and and I like to think that, you know, my positioning. I'm not I'm not not like Nostra Mucker Damus or whatever people want to purport to be out there on Wall Street with their price targets. I've never worked, you know, for the old wall and I'm not going to start with price targets now. I think higher for now until we say that we're getting out is how we're going to deal with it. And there's no other way for me to deal with it. Lithium is on your uh matrix here and it's having a bit of a comeback since it basically collapsed a few years ago. Uh what's the narrative now with lithium? There was the there was the EV narrative and then there was over supply from China. What is it now? >> Uh my main narrative is that it's up 60% in the last month. I mean that's that's that like again you can come up with a narrative as you know for pretty much anything in life. You the thing about narratives that's the most dangerous thing in the investor mind because of course it's totally human. We as humans want certainty. You know what I embrace is uncertainty. If something goes from and I was used to be short lithium. So again I I don't I don't have a narrative on why it was why why I had to be short lithium other than it broke my intermediate term trend signal and we were actually at that point entering what we call quad 4. And that's really the time where you don't want to be long these kind call them higher beta metals is in that type or growth metals that have all these narratives attached to them. The long-term narrative is going to be there. the shorter to intermediate term riskmanagement scenario needs to be riskmanaged. So, you know, lithium, you know, there's always been a good backs stop demand case for it, but you have to be in a global quad 2 environment. So, again, global quad 1, quad 2, you showed the, you know, the hedgei dials in terms of where we're at that there's no better setup for global demand for anything. That's also why, you know, again, why we're long copper. It's not it's there's there's no differentiation, at least in my own mind. I don't wake up in the morning saying, "Oh my god, I got I'm going to talk to Lynn today. I got to come up with a better way to pitch copper than than lithium." I'm long both and happily long both. >> The fact that lithium has gone up 60% in the last month. The fact that silver is up what 160% in the last year, gold's up 70 something% in the last year. At what point do you start taking profits? Here's your here's your newsletter. You wrote uh while your team wrote, "Precious metals continue to confirm quad one with gold pressing near the TRR." Uh what does TRR stand for in this context, by the way? 4500. Yeah, TRR is is the answer to the question. So the TRR stands for the top end of the risk range. So, you know, we have a trademarked risk range signal that we publish every day. Um, so the way that, you know, I I invest is I take a a core position and then I trade around the risk range. So, let's say I had a 2% position in something like lithium and it went up to the TRR. It went to the top end of my wrist range. Then I'd sell like 50 or 100 basis points. So then, you know, if I went from a 4% from a 2% position to a 4% position, then I'm down to 3 1/2 to 3. Every time it gets to the top end of the range, I'll sell some and then when it corrects, I buy some more. But I always keep that main core position that I buy. The when on these things, when you enter these positions, there is no more important thing. Anybody who tells you that market timing doesn't work, it's cuz they can't do market timing. That's what we specialize in which F is fully loaded with the short-term uh risk range. Top end of the range, low end of the range is top end of the range TRR versus lower uh lower lower end of the risk range. LRR is of course where you buy it more aggressively. >> Um how what do you think of uh some institutional managers strategies of maintaining a certain weight within their portfolio. Let's say they have a 5% waiting to gold. Gold goes up, you know, 70% this year. It's going to blow past their 5% waiting. So they sell enough just to maintain their 5%. Do you do that? >> Yeah. Yeah. Mine's 12. I mean, so for gold, because I gold is a currency, not a metal. Uh I can take a much bigger position. My max position in a commodity like lithium is 4%. Bitcoin, we're long that finally. Uh after being shorted, you know, the max for a commodity, which Bitcoin we call commodities, 4%, but max for gold, which is a currency, is 12. So, you know, so so that's we define I think that's we could get into a whole other discussion about this. I think it's I think it's something that most human beings that dabble in markets are are actually doing just that. They're dabbling. They don't have a plan on what their minimum and maximum position sizes are. They don't have a plan on how they touch it at the top end of the range, the bottom end of the range. We provide an entire, you know, solution for that. That's what the process is essentially. Uh overall then how often do you not just for gold but for any asset in your portfolio? How often do you change the waiting of that particular asset in your portfolio? a year, let's say >> change. Well, we never change what the minimum and the max are. We only change the waiting when again we'll reduce when we're at the top end of the range and we'll buy more when we're at the low end of the range. So, you're always moving within like for Bitcoin, for example, I'd never be bigger than four. I'm long Bitcoin, Ethereum, Avalanche. So, if I go max in all three of those, I'd have a 12% position, which would be four times three, right? So, um, the the beauty of this market, you know, David, is that you can rotate your hard-earned capital every single day into something that's actually going down. You know, you have there were major buying opportunities in the precious metals only 2 weeks ago. So, you know, you can you can sell some something of something that's working, reallocate. So, that's how I do it. I understand other people do it different ways, but I I have enough problems and my hair goes gray enough trying to execute on my own process. uh sectors now US sectors you've made some changes here uh sector style rotation continues to confirm quad one active rebalancing of signals evolve we removed our consumer discretionary long added a short in consumer staples this week and uh you have standing positions in industrials and utilities so you're short staples and you removed discretionary that >> and and we're short utilities yes >> that may seem contradictory on the surface can you explain that you're short a defensive sector but you also removed a cyclical sector. >> Yeah, I rem I just I just exchanged it for uh actually airline stocks which are jets. >> So the ETF is Jets and today today I was actually buying regional banks KRE because the banks are weak with JP Morgan but you know just replacing the main problem I had with XLY is that it has Tesla in it and Tesla is no longer signaling you know what I call signal strength. So it's such a heavy weight inside of the ETFs. This is essentially why I started my own ETF business. I don't like the construction of the ETFs that I have to buy. Um, so let's just launch our own, right? I mean, um, but the main point is we're short staples as small cap staples, PSC, and we're short utilities. Utilities is the only sector in the S&P I think that's down this year. We're only eight days, you know, eight trading days into the year, but again, it's been an alpha position for us. uh XLU utilities has been u whether you're long consumer cyclicals or classic cyclicals like in industrials we'd be long both >> the pink panther the quiet setup behind healthc care's breakout uh what is the uh uh what is the uh relationship to the the the metaphor here behind the behind this the why why is it called the pink panther here tell us about healthcare >> well because it's not healthcare the way Wall Street designs their healthcare ETF so we call it the pink panther Yeah, most people if you look at the Pink Panther, you'd prefer the Pink Panther than the XLV. We're we're actually long the XLV as well. Healthcare is an interesting one because healthcare last year, we started the year short it we actually started the year making a big call that that the stock market would crash in the first part of the year. It did. U then we started to rotate into sectors. Initially we didn't buy cyclicals. We actually bought the Pink Panther and we bought healthcare uh broadly and that was an excellent move uh because most people had at that point healthcare was just a dog and they got rid of it. Now now we're long it Michael Taylor who runs the Pink Panther or the Pink ETF um has been awesome. Uh there are stocks in there that aren't even healthcare stocks. They're actually cyclical stocks. So you get a bit of a kicker there. And uh you know I I I like Mike T. I think he likes when we make nice posts like that with the pink panther on. >> Well, um, do you think that, okay, just going back to banks for a minute, by the way, you read the story last Friday, Trump announced that he wants to cap credit card interest rates to 10%. Hasn't been enacted yet, but he wants to do that this year. But yet, and banks fell a lot, a lot most banks fell a lot in the news, but yet you're you're buying banks on the dip. You don't think that's going to happen where it affect their profitability? >> Yeah. On on to be clear, I'm buying regional banks, right? KR's regional banks. Um and and and yeah, the I would never underestimate, you know, the consistency that Trump will say the same thing over and over again. I mean, whether or not it's valid, it's intellectually correct. Like, I don't care. I'm not an intellect. Uh I think most people can tell. Um and again, it doesn't have to be right in my mind cuz I don't have a political mind. I I'm I always say I'm a like I'm not a Democrat. I'm not a Republican. I'm a Canadian. and I'm going to buy whatever is signaling buy and those regional banks um keep me away from being long some like we're not long like a credit card ETF or anything like that. >> Okay. Uh well, what do you think about the bigger banks though? Capital 1 dropped 6%. Uh JP Morgan down 4%, Cityroup, no. Uh yeah, Cityroup down 4%. JP Morgan, Bank of America fell 2%. Uh I mean not not huge moves, but credit card businesses aren't the only line of businesses, you know. So we we we have this ongoing thing happening. Do you do you see financials recovering from this or are there are there other headwinds uh that that that may push the chairs down even more? What do you think? >> Yeah, JP Morgan's an interesting one, right? Because they just took they they now, you know, even have the the Apple business, I believe, the Apple car business that Goldman screwed up or whatever. But I mean the um I would I'd stay away from that. I mean, when momentum turns in this market, you better accept it as the new reality and move on to the next play. I mean, you know, Visa broke, Mastercard broke, JP Morgan for now looks like it's hanging in on my trend signal, but it broke what we call immediate term trade support. So, that wouldn't be something incrementally we're buying. What you want to do, and it and it drives the valueoriented people nuts. You want to own momentum that's working. That means your account go up, right? It took me a long time to figure that out. uh like 25 years because again in our minds we want to be right. We want to be buying the thing that's down. No, no, no, no. I want to buy the thing that's correcting that is signaling higher highs, preferably higher all-time highs. And now all those credit card stocks that you mentioned, they're not signaling that. So, I would just stay away. >> Any other uh sectors or assets that you are really bullish on this year that we haven't discussed yet? >> Yeah, I like I like themes like space. um space quantum we're still we're less bullish on quantum than we are on space like the the ETF we've had a lot of success with is is called UFO um so again another another topic that we've been on top of I think that the a big theme will be the bag seven against like things like that you know there there are huge themes here to be capitalizing on defense spending obviously precious metals resource scarcity you know robotics space so When you look at, you know, some of the bearish trend signals that we have, I call them the bag seven because half of them are bag holding stocks right now, like they're not making any money. You know, Meta and Microsoft, which we we have as bearish trend signals. Those have been bloody awful stocks. Netflix has been worse. Um, so like there are a whole bunch of stocks that that a lot of the people own because they work for so long. I get into the organic growers and or well and not and or and a a blended portfolio of cyclical growers like we're along everything from like JB Hunt to Cat Tractor to HII Huntington which is a defense contractor. So you know there I I think that I mean our in our ETFs you can see this where we have much different blends than the the the people who want to be famous on CNBC in our ETFs. >> Yeah. Well, tell us about uh this new ETF that you just launched. >> Um, which one? >> I think there's a few. >> Yeah, we la I mean, so we launched Neil House's um uh fourth turning ETF. The ticker on that >> hand the one that you wanted. Yeah, >> heft heft forth turning like this is so if you're really if you think the world's going to end, there is a component in there for that. Uh for example, it's long precious metals. It's got plenty of uh defense stocks in particular. If you look inside you obviously ETFs you can look at the holdings at the close every day. So um I think one of the more interesting ones is hedge long short eight like it's called hells h e ls um because I I don't I don't see any competition for us on the short side. I mean certainly looking back to 2008 um so stock picking on the short side matters. There aren't many ETFs that do that. If there are a couple um bare ETFs, I'm actually short them. HDE and Dorsey Wrights ETFs, DWSH, we're short both of those. Um so we have those. We have those two. We have David Salem's uh hedgei asset allocation uh ETF that took her on that. He's been phenomenal. Um again, the the performance on these things I can't talk about. They should speak for themselves. And then there's Sam Ramen who's competing with like a Kathy Wood competitor. For us, it's called HGrow. So, quality growers, what you'll find in that one is not just the go- go stuff. You're going to see cyclical stocks in there, for example, uh and and stocks that maybe not everybody talks about on on Old Wall TV every day. >> Okay, great. Uh well, congrats again on all these launches and uh you've been definitely correct on a lot of your calls, including precious metals. So, uh great start to 2026. A volatile year so far, but not so much for the markets. So, overall then, let's close off the conversation. Overall, given your Quad 1 progrowth outlook, you don't see the S&P deviating too much from 7,000 points, at least to the downside. Is that fair to assume? That that's fair to assume. And if you want that risk manage, we have an ETF for that as well. It's called Ky. It's a It's a hedged S&P 500 product that competes with JP Morgan's, you know, well-known JP hedge product. And you can look at the performance differentials there. Uh but I I prefer the our best idea. I should have said it. Maybe it's a good one to close with. Uh is our biggest uh incremental US equity allocation last in December to get set up for this year was the Russell 2000. So we like the Russell 2000. We also like micro caps. IWC is the ticker for that. We much prefer that than the S&P. >> I'm just curious before we close off because we're both Canadian. What's your view on the TSX composite? Most of that is oil companies and resource stocks as you know had a tremendous year in 2025. I think up uh something like 35%. Um but a lot of it does depend on oil and with um you know Trump expanding its oil reserves his oil reserves to now Venezuela which is the country with the biggest oil reserves in the world uh that some analysts said could put some downside. Let's get your take. >> I I would say that the TSX looks like how Canada is going to look against team USA and Olympic hockey. Um the TS like let's just call team USA QQQ. >> Uh I'm long that but I think the TSX I mean first of all it has beaten Q's badly in the last month to two months. Uh the price momentum largely reflects that Canada owns a lot of the things back to your prior point that maybe uh Pump if he's playing a little Monopoly he'd like to own. So, you know, everybody knows that you'd like to be long of Nathan McKinnon, McDavid, and Mar over who Team USA has. Like, everybody knows that, but they'd have to live in Canada to understand that. >> All right. Okay. So, you're bullish in Canada as well. Thanks very much, Keith. Where can we uh where can we follow you and uh and your hockey predictions? Stay up. >> Those are those aren't I'm a Leafs fan, so that's that's the problem there. I'm terrible. Uh please don't follow me. Uh, but you can, you know, Keith McCulla on on Twitter. I'm up early every morning and and providing some of the stuff. We try to we try to educate a little bit for free, but um, now we have the ETFs. You can check that out too on hedgeam.com or hedgeiassetmanagement.com. >> Yeah, Keith's got a big following on X 280,000 subs followers now. Congratulations. And uh, yeah, so follow Keith there. Follow Hedgei. Links down below. Happy New Year once again. We'll we'll catch up again soon. Take care for now, Keith. >> Thanks, Dave. Appreciate it. >> Thanks for watching. Don't forget to like and subscribe and follow Keith and Hedgite. Links down below. And don't forget to use my code Lynn L I N when you sign up to Koshi. Remember, firsttime users can get $10 on their first $100 deposit when you use my code LI N Lin. Link down below or scan the QR code here.