Town Hall Chat
I thought there were blanks in that gun!
"Cut the crap, son. I've got their disciplinary files right here. Who dropped a whole truckload of fizzies into the swim meet? Who delivered the medical school cadavers to the alumni dinner? Every Halloween, the trees are filled with underwear. Every spring, the toilets explode."
Dean Vernon Wormer, Animal House
The autumn leaves littered Northern Kentucky as Professor Succo and I pulled into the university parking lot. Students strolled across campus, shoulders draped in knapsacks, chatting aimlessly about everything and nothing. A gentle breeze blew through the quad, carrying a nostalgic aroma that was particularly collegiate. Touch football was being played on the far lawn, a particularly fierce affair for such a fine day. And posted on the wall in the distance, flickering in the wind, a poster of Hoofy and Boo called attention to our town hall chat.
It's been a while since I've set foot in the college scene but John and I had a date with Matt Ford and the NKU community. We've been working with the good doctor and studying the effects of Minyanville as it pertains to reducing the intimidation of the financial markets. The Minx is a bit scary, as we know, and the young minds of tomorrow need some metaphorical friends if they hope to find their way. We've built a neat little university syndicate (click here for more information) and this forum was a natural extension of our virtual classroom.
We opened the room for a real-time Buzz & Banter, fielding questions from students, faculty and attending professionals. The topics ranged from the hidden fees at many funds, the necessity of filtering information and misinformation, taking proactive responsibility of your own finances, seeing both sides of every trade, assessing and judging your subjective risk and, of course, the role of Hoofy and Boo as they relate to these processes. It was a tremendous interaction and one that I hope will repeat in the not-too-distant future.
Turning my toggle towards the tape, I return to the squirm to find Hoofy knock, knock, knocking on acne's door. I humbly took off my bull costume late last week to A) squirrel a snazzy lil' schnitzel and B) view the dew during a perceived consolidation. S&P 1225ish has been a bit of a burden for the bovine beast but the four-letter sweater seems to be warming up. NDX 1630ish is the high from last December and this summer. It feels as if they wanna break on through to the other side and try to lead the year-end ride.
Is the upside a given? Hardly. I recently opined that this isn't trading. It's musical chairs. Or chicken. Or rock, paper, scissors with risk. Alotta fund managers are more concerned with relative performance than they are with the underlying risk. We can't hate the players, of course, as this game has been going on for years. But as I said at NKU yesterday, I'm quite certain that many mutual fund managers would craft a much different profile if their money was at stake rather than yours.
Alas, I digress, and as the tock is ticking closer to flicking, I wanna finish today's missive with some random rumblings:
- The action in the brokers and trannies plant seeds of another upside thrust for the broader tape. I discussed this potential with Succo all weekend as we chilled in the burbs. If Hoofy is right on his vision of flight, it would imply that the consumer has not, in fact, reached a tipping point and total debt (+300% of GDP) has more elasticity. Hard to see but not impossible.
- I picked up the paper this morning and it said that the market was up because oil was down. That could be, I suppose, but from what I've read on Minyanville, oil and equities simply don't correlate. More likely, the headline shoulda read "markets were up because fund managers were freaking that they might underperform if a year-end rally arrives."
- As much as it pains me to return to this extrapolation, I gotta go there. First there was a dot.com bubble. Then (now) there was (is) a real estate bubble. Could a virtual real estate bubble be grand finale? (Disclosure: I'm long virtual real estate).
- Gold, gold, gold. It broke $460 and is hangin' with (on?) Cliff Branch. I can't shake the savvy soothsayer's vibe when he opined "gold is exhibiting all the characteristics of a massive bull market but I wouldn't be shocked to see a watershed decline in the near-term " (to shake out the weaker hands).
- Watch the GSE's (on Freddie Mac's Oops, I did it again) and the homies (on Toll's Oh Brother!) as potential flies in today's ointment.
Good luck today!
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 firstname.lastname@example.org.
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