Dear MCM Friends,
We closed out Q1 of 2008 on a positive note. Despite not having a research team or a trading desk for the 1st time in my career, MCM's Global Long/Short portfolio compared favorably relative to all of the major US market indices.
MCM's March end and YTD Performance: +2.15% for the YTD (calc. on a gross basis)...
Index Performance for YTD, ended 3/31/08:
Dow Jones Industrial -7.55%
S&P 500 Index -9.92%
Nasdaq Composite -14.07%
Russell 2000 -10.19%
The more important news is that i now have a research team!
We opened our office this afternoon on the edge of Yale's campus, and we're happy to announce that we have started doing business as Research Edge, LLC. Our evolutionary operating system is called Hedgeye.com, and our website splash page launched today in conjunction with the firm's opening.
Your objective feedback throughout this process of innovation has been critical to my decision making, and i am looking forward to keeping our respective dialogues open. My distribution list was under 100 people, and I'll always remember these last 5 months as some of the most enjoyable of my career. Unfortunately, i had to reintroduce the alarm clock to my life again this morning.
Please login to www.Hedgeye.com, sign up, and pass along the good word. I am fired up to be back in a dressing room with a great team!
My new contact info is below.
Many Thanks,
Keith
Keith R. McCullough
CEO and Chief Investment Officer
RESEARCH EDGE, LLC
New Haven, CT
http://www.mcmmacro.blogspot.com/
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Tuesday, April 1, 2008
Saturday, March 8, 2008
MCM Performance update for the week ended March 7, 2008
For the week, and the year to date, MCM’s performance continues to compare favorably against all of the major US indices.
Our MCM Macro Theme from December 2007 is becoming seemingly more relevant by the day: 'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07'. It seems rather simple, but then again, most things do when considering them retrospectively - Hedge Funds should indeed hedge…
From Portfolio Managers to Asset Allocators, many of this industry's "savants" suggested throughout 2007 that single stock short selling was no longer a business they wanted to commit resources and capital to. In fact, some hedge funds actually talked the fund of funds community into giving them the capital to launch 'long only', 'concentrated', and 'activist' funds.
Of course, that was one of the many signs that this bull market cycle was topping. Tops are processes, not points... and as Santayana would say, "those who have not learned the lessons of history, are doomed to repeat them."
Core Short positions which contributed most positively to this week’s return: AN, BAC, CNET, APD, BLK, KMB, WYNN, and BAGL. We are pleased that we have already invested the time and patience into an investment process that allows us to run a net short business.
MCM's Global Long/Short Equity Portfolio:
Week of March 3/08: +1.46%
2008 Year to Date: +3.32%
Index Performance:
Week of March 3/08: Dow -(3.04%), S&P 500 -(2.80%), Nasdaq -(2.60%), Russell 2000 -(3.80%)
2008 Year to Date: Dow -(10.34%), S&P 500 -(11.92%), Nasdaq -(16.58%), Russell 2000 -(13.83%)
We’re looking forward to having our market strategy, themes, and bottoms up company research in print for you again in the coming months.
Best of luck out there in the meantime,
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Our MCM Macro Theme from December 2007 is becoming seemingly more relevant by the day: 'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07'. It seems rather simple, but then again, most things do when considering them retrospectively - Hedge Funds should indeed hedge…
From Portfolio Managers to Asset Allocators, many of this industry's "savants" suggested throughout 2007 that single stock short selling was no longer a business they wanted to commit resources and capital to. In fact, some hedge funds actually talked the fund of funds community into giving them the capital to launch 'long only', 'concentrated', and 'activist' funds.
Of course, that was one of the many signs that this bull market cycle was topping. Tops are processes, not points... and as Santayana would say, "those who have not learned the lessons of history, are doomed to repeat them."
Core Short positions which contributed most positively to this week’s return: AN, BAC, CNET, APD, BLK, KMB, WYNN, and BAGL. We are pleased that we have already invested the time and patience into an investment process that allows us to run a net short business.
MCM's Global Long/Short Equity Portfolio:
Week of March 3/08: +1.46%
2008 Year to Date: +3.32%
Index Performance:
Week of March 3/08: Dow -(3.04%), S&P 500 -(2.80%), Nasdaq -(2.60%), Russell 2000 -(3.80%)
2008 Year to Date: Dow -(10.34%), S&P 500 -(11.92%), Nasdaq -(16.58%), Russell 2000 -(13.83%)
We’re looking forward to having our market strategy, themes, and bottoms up company research in print for you again in the coming months.
Best of luck out there in the meantime,
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Sunday, March 2, 2008
MCM's Year To Date Performance...
At the begining of January I moved my focus away from the daily rigors of being held accountable to my blog, to building out our new team and business.
All the while, I've been getting a lot of requests for updates on our operational progress and MCM's year to date portfolio performance.
With regards to the latter, at February's month end prices, MCM's Global Long/Short Equity portfolio is +1.86%.
From a top down perspective, many of the MCM Macro Themes that we spoke to in Q4 of 2007, helped drive performance. Inflation and Fed Centricity were two of the obvious ones that helped our net long positions in gold and silver, while our 'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07' theme has proven to be very additive to some of our core short positions like Einstein Noah Bagels (BAGL), which is captive to wheat prices.
MCM's performance compares favorably against all of the major US indices:
2008-to-date: Dow (7.53%), S&P (9.38%), Nasdaq (14.36%), Russell (10.42%)
With respect to the former, I'm looking forward to updating you all on our new company name and key executives in the coming weeks.
Our new offices are set to open at 111 Whitney Avenue, in New Haven, CT on April the 1st.
Best,
Keith
All the while, I've been getting a lot of requests for updates on our operational progress and MCM's year to date portfolio performance.
With regards to the latter, at February's month end prices, MCM's Global Long/Short Equity portfolio is +1.86%.
From a top down perspective, many of the MCM Macro Themes that we spoke to in Q4 of 2007, helped drive performance. Inflation and Fed Centricity were two of the obvious ones that helped our net long positions in gold and silver, while our 'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07' theme has proven to be very additive to some of our core short positions like Einstein Noah Bagels (BAGL), which is captive to wheat prices.
MCM's performance compares favorably against all of the major US indices:
2008-to-date: Dow (7.53%), S&P (9.38%), Nasdaq (14.36%), Russell (10.42%)
With respect to the former, I'm looking forward to updating you all on our new company name and key executives in the coming weeks.
Our new offices are set to open at 111 Whitney Avenue, in New Haven, CT on April the 1st.
Best,
Keith
Saturday, January 12, 2008
MCM Macro Signing off, for now... Thank You -KM
Dear MCM Friends,
First, let me thank you for taking the time out to read what I've had to say for the last 10 weeks. After almost 10 years on Wall Street, spending 10 weeks by myself, hammering out my sometimes nonsensical prose, had its moments of doubt! Your constructive feedback kept me going however, and for that I will be forever grateful.
In hindsight, it helps that we ended up on the right side of a major US stock market move, but making a short term "call" on the market is not a basis for a long term business model. Refining and improving my already proven investment process, however, is.
This week's US Market Performance:
Dow (1.51%); S&P500 (0.75%); Nasdaq (2.58%); Russell 2000 (2.35%)
For January 2008 to date:
Dow (4.96%); S&P500 (4.59%); Nasdaq (8.01%); Russell 2000 (8.01%)
The most important takeaway from my time away from the madness of the hedge fund industry's crowds is the confirmation in my gut of the fundamental belief that understanding company and economic cycles are processes, not points. Patience is required, and consensus building is not. Many Hedge Fund managers attempt to build businesses around who made the last "great call." Few understand how repeatable the investment process was behind that "call". As a result, they are often managing their businesses reactively, rather than proactively.
At this stage of my life, if my #1 ambition was to be compensated, I'd already have accepted one of the many generous hedge fund jobs that have been put on the table. Instead, I've decided to hang my hat on the convictions born out of my investment process - they beat any Wall Street offer you can give me.
To say that the game of levered long investing is coming to an end would be an understatement. With that new reality come tremendous market opportunities for those with entrepreneurial ideas that are creatively destructive.
I've decided to take this idea to the next level and invest my time and capital into building a real business. I intend to compete with mostly everything that's considered "acceptable investment advice" by current market participants. For the next 6-8 weeks, I'll be shifting into my top gear. I have my new team in place, and we're ready to grind.
Unfortunately, that means my focus will be moving to the operational side, and I won't be able to provide you with the same level of diligence that stands behind the convictions I've been willing to be held accountable for via MCM Trades, Trends, Themes, or Trades.
But, I'll be back!
Best of luck out there, and thanks again.
Keith McCullough
First, let me thank you for taking the time out to read what I've had to say for the last 10 weeks. After almost 10 years on Wall Street, spending 10 weeks by myself, hammering out my sometimes nonsensical prose, had its moments of doubt! Your constructive feedback kept me going however, and for that I will be forever grateful.
In hindsight, it helps that we ended up on the right side of a major US stock market move, but making a short term "call" on the market is not a basis for a long term business model. Refining and improving my already proven investment process, however, is.
This week's US Market Performance:
Dow (1.51%); S&P500 (0.75%); Nasdaq (2.58%); Russell 2000 (2.35%)
For January 2008 to date:
Dow (4.96%); S&P500 (4.59%); Nasdaq (8.01%); Russell 2000 (8.01%)
The most important takeaway from my time away from the madness of the hedge fund industry's crowds is the confirmation in my gut of the fundamental belief that understanding company and economic cycles are processes, not points. Patience is required, and consensus building is not. Many Hedge Fund managers attempt to build businesses around who made the last "great call." Few understand how repeatable the investment process was behind that "call". As a result, they are often managing their businesses reactively, rather than proactively.
At this stage of my life, if my #1 ambition was to be compensated, I'd already have accepted one of the many generous hedge fund jobs that have been put on the table. Instead, I've decided to hang my hat on the convictions born out of my investment process - they beat any Wall Street offer you can give me.
To say that the game of levered long investing is coming to an end would be an understatement. With that new reality come tremendous market opportunities for those with entrepreneurial ideas that are creatively destructive.
I've decided to take this idea to the next level and invest my time and capital into building a real business. I intend to compete with mostly everything that's considered "acceptable investment advice" by current market participants. For the next 6-8 weeks, I'll be shifting into my top gear. I have my new team in place, and we're ready to grind.
Unfortunately, that means my focus will be moving to the operational side, and I won't be able to provide you with the same level of diligence that stands behind the convictions I've been willing to be held accountable for via MCM Trades, Trends, Themes, or Trades.
But, I'll be back!
Best of luck out there, and thanks again.
Keith McCullough
Thursday, January 10, 2008
MCM Macro Intraday Fed Comment, 1/10/08... 'Ooolah-lah'
So Ben Bernanke is concerned and "prepared to act in a decisive and timely manner"... Ooolah-lah, isnt that a shocking revelation!
The Fed Funds Futures opened this morning with 76% odds that he not only cuts at the January meeting, but cuts by 50 basis points. The odds of Bernanke not cutting stand at zero %.
Where i was raised, when my Dad gave me zero odds - zero meant zero. And i'm not entirely sure why anyone considers anything that Bernanke is revealing today as anything other than historical reflections on what we should all consider reality by now.
I'm not entirely sure why CNBC had a "Bernanke Count Down" clock at the bottom of their screen today either. This is a $14 Trillion economy, not a Bowl Game.
History will not look back kindly on this Fed Centric Mania. In the moment, it is too emotionally charged to fundamentally respect.
Be careful chasing rallies. The CPI and PPI inflation reports loom next week, and Bernanke's academic integrity will be hostage to those releases.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
The Fed Funds Futures opened this morning with 76% odds that he not only cuts at the January meeting, but cuts by 50 basis points. The odds of Bernanke not cutting stand at zero %.
Where i was raised, when my Dad gave me zero odds - zero meant zero. And i'm not entirely sure why anyone considers anything that Bernanke is revealing today as anything other than historical reflections on what we should all consider reality by now.
I'm not entirely sure why CNBC had a "Bernanke Count Down" clock at the bottom of their screen today either. This is a $14 Trillion economy, not a Bowl Game.
History will not look back kindly on this Fed Centric Mania. In the moment, it is too emotionally charged to fundamentally respect.
Be careful chasing rallies. The CPI and PPI inflation reports loom next week, and Bernanke's academic integrity will be hostage to those releases.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
MCM Macro BonTon (BONT) update, 1/10/08... 'Bankruptcy Odds Increasing'
The company is effectively reporting that they did not have a Christmas. When your business model is to incur retail sales, thats bad, and generally just not good for investor morale.
Same store sales were down over -11%, with the BonTon stores themselves down -14.2%.
The company's prior "guidance" was to earn $1.50-1.80/share. Now they're revising that to $.50-.$80/share. This explains, partly, why the stock was down over -20% at one point intraday yesterday, as this news had to have leaked into the halls of the hedge fund community.
When "comping" down double digit sales declines, a levered retailer's income statement has comparable de-leverage characteristics to an Airline company. Generally, investors dont respect that fact, until they have to.
The beginning of another US Retail Bankruptcy cycle is under way. Buy WalMart, and short the rest.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Same store sales were down over -11%, with the BonTon stores themselves down -14.2%.
The company's prior "guidance" was to earn $1.50-1.80/share. Now they're revising that to $.50-.$80/share. This explains, partly, why the stock was down over -20% at one point intraday yesterday, as this news had to have leaked into the halls of the hedge fund community.
When "comping" down double digit sales declines, a levered retailer's income statement has comparable de-leverage characteristics to an Airline company. Generally, investors dont respect that fact, until they have to.
The beginning of another US Retail Bankruptcy cycle is under way. Buy WalMart, and short the rest.
KM
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
Wednesday, January 9, 2008
MCM Macro Intraday Trades 1/9/08... 'Just Shorts'
Stocks Discussed: EWS, TM, and TCO...
MCM Trades/Fades
1. Shorting Singapore's ETF (EWS) into the close, $13.40... MCM Trend moving to negative on Singapore. Note to follow...
2. Shorting Toyota (TM) into the close, $105.20... Note to follow.
3. Re-Shorting Taubman Centers (TCO) into the close $$45.11... same thesis; stock is up +2.5% today, giving us another great entry point.
KM
___________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07'
Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07'
Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07''US$ Bottoming is a Process, not a Point' -Nov07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec07'
'Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec07'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec07'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07'
'Long Term Macro Cycle tops are processes, not points' -Jan08'
___________________________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
MCM Trades/Fades
1. Shorting Singapore's ETF (EWS) into the close, $13.40... MCM Trend moving to negative on Singapore. Note to follow...
2. Shorting Toyota (TM) into the close, $105.20... Note to follow.
3. Re-Shorting Taubman Centers (TCO) into the close $$45.11... same thesis; stock is up +2.5% today, giving us another great entry point.
KM
___________________________________________
MCM Themes
Fed Centric/Fed Cut bull case is the Tree; Access to Credit/Capital the Forest... -Nov07'
Rebalancing to the Left; look for Socialism to regain her footing, Globally, in 2008... -Nov07'
Bonds, Banks, and Bailouts; Blue Magic is bad, in the end... -Nov07''US$ Bottoming is a Process, not a Point' -Nov07'
'YouTubing America' - Transparency/Accountability will transform Washington to Wall Street -Dec07'
'Paulson & the Fed Centrists want you to call 1-888-995-HOPE' -Dec07'
'The Double Edged Fear Sword: Fear is now the dominating market factor, not Credit - Fear for Fed Centric Bulls & Consensus Bears alike'-Dec07'
'Global Basic Food Consumption Growth will takeover from the consensus "Its Global this time" Industrial Production Growth story in 2008'-Dec07'
'Litigations & Redemptions' - The Tide has rolled out on the Levered Long Community'-Dec07'
'Long Term Macro Cycle tops are processes, not points' -Jan08'
___________________________________________________________________
MCM Disclosure/Disclaimer: This email and/or blog is for a select group of my friends, and represents a beta test of an idea that i am incubating. My email and blog writings are prepared without regard to the unique circumstances or goals of those who read them. They do not provide investment advice that should be specifically acted upon without considering the all encompassing range of investment information and/or considerations available in the public domain and/or without considering all appropriate professional advice. This should not be considered a solicitation to buy or sell any security or to participate in any investment strategy. The information and editorials in these writings are not necessarily complete or perfectly accurate and are not guaranteed by Keith McCullough or MCM. This information is protected from disclosure and constitute opinions only as of the date of their issuance. Opinions are subject to change without notice, and Keith McCullough or MCM do not accept any liability whatsoever for any losses estimated to be attributable to any use of this content. Keith McCullough and/or McCullough Capital Management, Inc. likely owns and/or is currently trading in all of the securities cited in these emails and/or blogs.
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