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Where We Are and Where We're Going

Todd Harrison Oct 01, 2008 6:45 am


		A "time out" for reflection before the home stretch.

Theme 6: Dislocation

January thought: Despite Herculean efforts by global central banks, I believe we will see a market dislocation this year as measured by a 10% move (or more) in a single week.

Update: We often talk about the difference between taking our medicine as a function of time and price and being injected with artificial drugs with hopes of staving off the disease. There were several instances this year when supply seemed ready to overwhelm demand but the powers that be were at the ready.

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We offered last month that it would be a September to Remember and drew attention to the disparity between credit and equity markets.

While volatility has been percolating for some time, this theme officially arrived like a clap of thunder on Monday when the S&P dropped 9%, the NDX slipped 10.5%, the bank index (BKX) lost 21%, broker-dealers (XBD) shed 13.5% and energy was off 10% across the board.

Theme 7: Vertical Social Networking

January thought: Last year, we offered that life-stage marketing would emerge as a media catchphrase and vertical social networking is a direct extension of that. The ability to connect with others who share common interests and similar goals will not only build brand loyalty, but also create organic global distribution that will challenge traditional models of big media.

Update: Social networking, once considered to be the second coming of the “killer app,” has become the cost of entry in the online space. Most media outlets either have—or are building—applications that allow their networks to commingle.

While acceptance is spreading, the pace of innovation has deflated the value of these properties. Indeed, many media organizations—Minyanville included—have benefited from the second mover advantage that allows us to learn from the missteps of others.

The next phase of this media ancillary will be theme brands that cover vertical market segments such as sports, science, healthcare and finance. The trick—and opportunity—is to identify properties with branded properties across industry continuums.

Theme 8: High Anxiety

January thought: We've already entered recession, one that's been masked by the lower dollar and hidden behind economic numbers skewed by a slimming margin of society. This dynamic will inevitably manifest into the elections, both stateside and abroad, as political infighting and geopolitical tensions mount.

Update: In December 2006, I was asked what concerned me most about the stock market. My response was that while the Dow Jones was at all-time highs, nobody really felt like we were at all-time highs.

Social mood and risk appetite are the determinants of financial markets. As we’ve repeatedly said in Minyanville: The stock market crash of 1929 didn’t cause The Great Depression, The Great Depression caused the stock market to crash.

Societal tensions will continue to percolate, both domestically and abroad, and the potential for social unrest remains a viable concern into the election and beyond. That may or may not be the catalyst for the stateside transfer of troops on October 1st but it should remain on our collective radar nonetheless.


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Comments (9)

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Lloyd Venable

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10-01-2008, 12:22 pm
Talk about societal acrimony! I think we have arrived. Read More

Darren H

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10-01-2008, 12:37 pm
To Todd and all you Minyans over there. Firstly, thank you thankyou for all your insights, perspectives, honesty and humor. I have been an avid reader from the Land Down Under for the last couple of years and absolutely love your your wor Read More

Craig Nickman

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10-01-2008, 10:16 pm
Excellent post Darren! After all of the money that has been thrown at this problem already,I can't believe anyone thinks that this 700 billion dollar effort is the "silver bullet" needed to right the economic ship. It is just throwi Read More

William Sinacori

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10-01-2008, 10:48 pm
Darren, Go, you good thing! (My wife has an Aussie pal). You hit the nail on the head. And, as Americans, the joke is on us. Funny thing is that everyone is yelling and screaming as if there is anything to be done about i Read More

John Powers

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10-02-2008, 3:19 pm
In the 1980's the experts said we did not need manufacturing jobs in an information economy, so the manufacturing jobs went overseas to slave labor. In the 1990's the experts said we did not need information jobs in a service Read More


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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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