By Todd Harrison Dec 15, 2004 8:05 am
Good morning and welcome back to the icy track. There's a chill in the air and nary a care as Hoofy skates on with stylish flair. With time on his side and wind at his back, he's leading the squeeze of the sad ursine pack. "The higher we go, the more it'll show," he said as he sped and counted his dough, "the way that I see it, it's not gonna slow 'till the weather gets better and melts all the snow!" Can thin ice support this now crowded pond and leave all the critters with memories fond? We'll know soon enough as we dust off our blades and edge ourselves into the Minxy Capades!
I walked into my office this morning, flipped on the lights and couldn't believe my eyes. Crouched in the far, dark corner was a shaking and shivering Boo. Hairless and harried, he looked as if he hadn't slept in days! I approached the young bear but as I took a step, he cowered and hid behind his beefy paws. It took me a good ten minutes to assure him that he's among friends and, after I covered him in a blanket and poured some hot chocolate, he began to look like Boo anew.
"I've learned some important lessons in the last coupla months," he said as the color started to return to his cheeks, "but I gotta tell ya Toddo, even my pals in Red Dye are buying into the year-end rally thesis. When bears are long and bulls are longer, something could be wrong and wronger!" I studied my metaphorical friend and nodded as I absorbed his vibe. I knew he felt betrayed when I briefly---and I mean briefly--donned the bull costume on Friday and keyed on Citigroup (C:NYSE) (through the 200-day) and Google (GOOG:NASD) (pennant chase) ever since.
"What have you learned?" I asked in an attempt to turn the conversation into a positive experience. "For starters," he began, "there is always a bull case and a bear case but the collective perception is the dynamic that dictates reality." He paused to sip his cocoa and continued. "While the realists were watching the dollar drip and oil skip, the financial mechanism was working off the overbought condition as a function of time (rather than price). By the time the greenback firmed and crude took a haircut, there was fuel in the bovine tank, fresh legs for the rally and intense pressure to keep up with the Dow Joneses."
"That's the trick to trading," I offered, "is that you have to see everything but filter accordingly. There is a bewildering cacophony of noise in the marketplace and most of it won't matter to your day-to-day performance. Focus, my friend, and filter. And understand that after the residual friction drips to tomorrow's front page, all will seem obvious with the benefit of hindsight. That's the difference between trading and media--one creates the facts while the other simply reports them."
"So you're saying that my broad concerns don't matter right now?" I studied the bear for a moment and searched for the appropriate response. "I'm simply saying that those particular elements won't "matter" until prices turn. That's when they'll get "loud" and be assigned as reasons for the rhyme. This morning's Investor's Intelligence survey underscores that very dynamic. We're officially in a lopsided red zone but until the ice cracks, the headlines will focus on increased M&A, technical breakouts and year-end cheer. And with a few weeks left on the calendar--and seven short days 'till the Minyanville Festivus--the games have only just begun!"
Boo stood up for the first time all morning, wrapped the blanket tightly around his shoulders and walked to me. "You're my brah, you know that right?" We smiled at each other, I gave him the patented Ruby wink and he found his way out the front door. I knew it was an ugly time for the ursine but I had no idea that the mood was so dire. Perhaps our bear has looked into his abyss and found his character. If so, and the fire in his belly lights up, he's gonna catch a lot of bulls looking the long way.
Good luck today.
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