Here's Hedgeye's Playbook in One Minute

Key Concepts

• Economic Quads: A framework for categorizing economic conditions based on growth and inflation trends.
• Risk Range Tool: A proprietary tool that uses price, volume, and volatility to define trading boundaries.
• Incremental Trading: A strategy of building and trimming positions in small, consistent steps.
• Radical Transparency: The practice of openly sharing trading activities and rationale with subscribers.
• Alpha: Excess return or outperformance compared to a benchmark.

Hedgei's Playbook: A Detailed Summary

This summary outlines Hedgei's four-step trading playbook, designed for consistent, data-driven market participation.

1. Scout the Ice: Economic Modeling

Hedgei employs a rigorous economic modeling process, analyzing growth and inflation for over 50 economies on a quarterly basis. This analysis categorizes each economy into one of four distinct "quads":

• Quad One: Characterized by accelerating growth and slowing inflation.
• Quad Two: Defined by accelerating growth and accelerating inflation.
• Quad Three: Features slowing growth and accelerating inflation.
• Quad Four: Represents slowing growth and slowing inflation.

This quad system provides a foundational understanding of the macroeconomic environment, informing subsequent trading decisions.

2. Mark the Boards: The Risk Range Tool

The "Risk Range Tool" is a proprietary mechanism that leverages price, volume, and volatility data to establish daily trading boundaries. This tool functions analogously to the boards of a hockey rink, providing clear, objective limits for market activity.

• Top End: When the market reaches the upper boundary, the strategy dictates trimming positions (selling).
• Bottom End: Conversely, when the market hits the lower boundary, the strategy suggests adding to positions (buying).

This approach eliminates guesswork and provides a defined framework for entry and exit points.

3. Build the Lineup: Incremental Position Management

Hedgei advocates for a disciplined, incremental approach to building and managing trading positions. This methodology emphasizes:

• Planting Positions Bit by Bit on Sale: Accumulating positions gradually when assets are undervalued or "on sale."
• Clipping Profits Bit by Bit After Rallies: Taking profits in small, consistent increments as the market rallies.

The core principle is to avoid "all-in, all-out hero moves." Instead, the strategy focuses on accumulating small edges over time, which collectively contribute to generating alpha. As stated, "We're winning more and more as time goes on."

4. Change on the Fly: Radical Transparency and Adaptability

Hedgei operates with a commitment to "radical transparency." Every trade is meticulously timestamped and shared with subscribers. This transparency is facilitated through:

• Morning Notes: Providing context and outlook for the trading day.
• Live Shows: Offering real-time market commentary and analysis.
• Portfolio Updates: Detailing current positions and performance.

This open approach ensures accountability and reinforces the repeatability of the trading process. The emphasis is on adapting to market conditions as they evolve, rather than adhering rigidly to a static plan.

Hedgei's Mantra and Conclusion

Hedgei's core trading philosophy is encapsulated in its simple mantra: "Model the quads, respect the range, and move in increments." This playbook, when followed, aims to foster consistent winning through a structured, data-driven, and transparent approach to market participation. The call to action is to join their team and follow this playbook to "win with Hedgei." Further information is available at hedgi.com.