Random Thoughts: Welcome to the Jungle

By Todd Harrison  JAN 20, 2009 4:00 PM

If you're not careful, you could get lost out there.


Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also History in the Making? and Is the Obama Bounce Coming?

So Passes the Torch... - 12:25 pm

More Answers I Really Wanna Know... - 1:41 pm

The financial news you need to know before you know you need it? - 2:30 pm

Thy Bacon Be Shakin! - 3:00 pm

Seeing the Art Carnage in the financials, I thought it might be useful to update our S&P vs. BKX chart given the correlation. 

Click to enlarge

Therein lies the risk for the bottom nibblers in our midst. Note the two circles to the left--the top is the banks and the other is the S&P. As we continue to track it (the circles to the right), the top one is the S&P and the other lower circle is the banks.

See all sides, regardless of which way you choose to play.

If I knew the way, I would take you home... - 3:50 pm

I would like to take a moment to communicate with those who felt it necessary to lob grenades in the general direction of several Minyanville Professors. Granted, I've only seen two today but as that matches the grand total for the last few years, I felt it worthy of a comment. 

Old school Minyans have readied for the societal acrimony we've long discussed but the reaction to news is more important than the news itself. Indeed, it's easier to write about "a socioeconomic malaise entirely more depressing than a recession" than it is to live it, particularly as the bear claws at those we love. 

Just as bad seasons define good fans (go Raiders!), bad times define good alliances. Take me at my word, the importance of Minyanville as a community will grow in scope as we edge through this new world order. Please keep that in mind when communicating with those who give so unselfishly of their time. It's brutal out there, I know, but we've gotta stick together, now more than ever.

Some Random Vibes into the close:

In what can only be described as a Toddo two-step, I was stopped out of my SSO position and, upon further reflection, nibbled back at some front month calls. I'll toss an asterisk on this by saying "I ain't seeing much that bodes well for Hoofy" but it's a small bet and I'm alright carrying it for the time being.

Ditto Bank America (BAC), which I tossed on this morning with a $1 stop. I can list (and have listed) a litany of reasons why investors should avoid financials, including common stock holders being on the end of an increasingly long capital structure line. Still, much with Citigroup (C) at $3.75 (the first time), I'm sensing a mean-reverting bounce before they ultimately go where they're destined to go.

Again, and this is important, I'm afforded the opportunity to "take some shots" as a function of my oft-communicated cash hoarding posture. Many aren't in the same boat, I know, which is why I bristle when the word "advice" comes up in conversation. Play within your means and stay true to you. For just as Minyanville won't accept snappage for sounding the alarm in years past, we can't shoulder the blame for trades gone awry.

In the immortal words of the fat man:

There is a road, no simple highway,
Between the dawn and the dark of night,
And if you go no one may follow,
That path is for your steps alone

Fare ye well into the bell and may peace be with you.


Position in USO, BAC, SSO

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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