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Joe Kool


What Hump?


She cuts you once, she cuts you twice
But still you believe
The wound is so fresh you can taste the blood
But you don't have strength to leave

(Billy Joel)

Good morning as we count the stack on our aching back. We've used alotta analogies over the years, which I suppose is apropos in a metaphorical community. We had the Razor Burn in 2002, The Burned Razor in '03 and a Casting Call towards Ice Capades in '04, all of which shaped year-end landscapes. And here we are, ready for the '05 drive with the averages flat and white knuckled traders gripping the handlebars oh-so-tight.

When we picked up the chatter that Boom Boom Bernanke would succeed Elmer in the hot seat, my internal odds for a year-end rally upticked. It's not that I believed in Mr. Bernanke, per se, I simply climbed into the mindset of the masses and arrived at the conclusion that perception could buoy psychology. Whether or not Big Ben was the root cause of the recent lift will never be known. And for purposes of our P&L, it really doesn't matter.

We often talk about the two sides of the trade and our current juncture has illuminated that discussion. Over in Matador City, they're looking at all-time highs in the trannies and brokers as a precursor to an '06 equity boom. Across town in Red Dye, Boo views the mess at General Motors and Fannie as symptomatic of a broader malaise unfolding in the context of a psychology bubble. One of these critters is bound to be bitter, we know, and the implications will reach far.

I view this dew as the Camelback Track, a market that is laboring towards 2006 with mounting worries and internal strains. To be sure, earnings season wasn't up to snuff, with virtually every tech bellwether (sans Google) serving as a reminder of slower times. In a world of rate-dependent finance-based conglomerates, pending accounting overhauls and slowing housing (HGX -20%), it's sure hard to miss the storm clouds. The inherent irony is that the longer the camel can stand on four feet, the more emboldened folks will become that bad news doesn't "matter."

Where do I stand? Right here, thank you, with my longer-term stuff weighted to energy and metals and my short-term stuff disciplined and defined. While I used to trade more actively, the tape has changed and perhaps I have as well. I'm a big believer that the ability not to trade is as important as trading ability and capital preservation is the first step towards profitability. That doesn't mean I'm shying away from risk, mind you, it simply means that I'm being more judicious and selective with my process.

Good luck today.


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positions in select energy and metal equities

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

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