When Success Springs Out of Failure (w/ Keith McCullough)

Keith McCullough, CEO of Hedgeye, talks about how he used failure to fuel his success. From getting fired and stoking his entrepreneurial spirits, McCullough saw an opportunity to give the investment research business a new, more transparent perspective. This video is excerpted from a piece published on Real Vision on January 25, 2019 entitled “A New Model to Manage Macro Risk.”

#finance #investing #economy

About How I Got My Start In Finance:
In this series, legends of the financial industry tell the stories of how they got their starts.

About Real Vision™:
Real Vision™ is the destination for the world’s most successful investors to share their thoughts about what’s happening in today's markets. Think: TED Talks for Finance. On Real Vision™ you get exclusive access to watch the most successful investors, hedge fund managers and traders who share their frank and in-depth investment insights with no agenda, hype or bias. Make smart investment decisions and grow your portfolio with original content brought to you by the biggest names in finance, who get to say what they really think on Real Vision™.

Connect with Real Vision™ Online:

When Success Springs Out of Failure (w/ Keith McCullough)

Transcript:
JUSTINE UNDERHILL: Welcome to How I Got My Start in Finance. In this episode, Hedgeye CEO
Keith McCullough speaks with Real Vision co-founder and CEO Raoul Pal about using failure to
find his calling.
KEITH MCCULLOUGH: So now I have a company called Hedgeye that's 10 years old. When I
started as any other analyst on Wall Street, got a job as a hedge fund analyst. Didn't know what I
was doing. Sort to figured that out a little bit. I worked with a guy named John Dawson as he was
breaking up with a guy named Art Samberg, if-- you probably recall Pequot Capital.
RAOUL PAL: Yeah. Art's been on Real Vision.
KEITH MCCULLOUGH: Yeah, OK, cool. And so we were right there on Pequot Avenue. That's
why it's called Pequot in Southport Connecticut. And I cut my chops as a buy side analyst. Then
they gave me my own book, probably too early. Back then we didn't have factor exposures or
limits--
RAOUL PAL: Which year was this?
KEITH MCCULLOUGH: This was back in-- well, I started as an analyst back in 2000.
RAOUL PAL: Right. OK.
KEITH MCCULLOUGH: I graduated from college in '99. As a Canadian, you're about 35 years
old at that point. So then I rolled into your traditional Wall Street investment banking program.
Couldn't stand that after a year and went to the buy side. And then eventually became a portfolio
manager, had my own fund, and sold it--
RAOUL PAL: And you were running tech-- tech portfolio, or--
KEITH MCCULLOUGH: Consumer. Global consumer. With a big-- and that's how I got into global
macro, was I got tired of modeling companies that couldn't tell me what the forward outlook was
from a macro perspective. Because that's, of course, what they would always get wrong, so I
would get wrong. And I didn't like being wrong. So I started to build a global macro overlay to
actually analyzing companies from a bottom up perspective, which was easier with global
companies like Nike, for example, or some of the big ones that I started to understand better
earlier.
But it all started with just being an analyst. I started as an analyst. And now today, like, as-- I
guess I moonlight as a macro strategist. But most of my-- all my macro calls are borne out of that
same analytical process. That's 20 years-- we're almost 20 years later. But I've really just applied
most of my fundamental learnings as a bottom up analyst to my top down view. And that's
certainly not a qualitative one. That's how I quantify it. Like, this whole rate of change process that
we've built and whatnot.

[stevehunsberger]

Two of the best, most helpful people on Wall Street for every type of investor.

[summerflashsale]

im 28 years old, conservative and no college degree, I've known there has been something wrong in all markets when I noticed how hard I was working and how much people were spending and making less than I was. I also noticed housing. I bought my house in 2010 so Im not complaining and I should extrapolate soon if possible, but with that being said you know there is a problem that within 10 years a house goes from $45, 000 to $265, 000. The record high debt levels and social platforms that prop up debt the list goes on. People will soon realize social media is the last of their worries. Im confused on what I should do though. I've been working my tail off and I have only a small amount of liquid and some gold. Im basically holding 85% cash and 15% gold with a house that has insulation to levels of 2008. Its just a shame that I can't be an entrepreneur without worrying about other people mistakes. Instead of being able to buy and fix solutions we just double down on the trash can game plan. In this case quadruple down. What happened to money talks bs walks? I need a degree so I can just get the democratic state out of my way which is complete trash ideology. Anyone with a brain can see the garbage ideology surrounding the liberal spending policies and what Obama did to our national debt, pelosi is the real cover up. Venezuela 2020 if people don't start bashing all the dems off stage!!! BBB rated credit = 50% complete garbage (banks dont want you to know their liberal ideology and to pressure lowering rates). 9 trillion in corporate debt and counting, bank of america receiving TARP HANDOUTS (Troubled Asset Relief Program) upwards of $30 million a quater! The social agenda will not work!!!! Bail on every company that is not producing positive net incomes! This recession is going to teach the social liberals a lesson. Beggars Can't be choosers! %50 of all households across america cant afford an emergency of $500 or more. Private debt and college debt at all time highs!!! Crony capitalism is the democratic party!! Jobs save people allot of turmoil!!! True capitalism and free market trade allows all around pure competition! %100 of all manual labor across %100 of all corporations is done by only %30 of the employees!!! Mandatory via democratic state laws involving Human resource acknowledgement and pure discrimination toward conservative production workers and mandatory health care for full time workers, and labor unions that promote negative productivity across multiple fields of labor. Zombie companies that are daily being split into shell companies 4, 5, 6, 7, even 8 times dispersing the debt and covering behind shields of lawyers also induced by college into the social liberal ideology of small business is bad and corporations are great "like high schools". Only the entire state is a "dead zone for small business" because of social liberal laws that are actually barriers to control small business.