Monday Morning Quarterback
Please keep a close eye on BKX 106 and XBD 200 as clues in the fuse.
A mighty Ruby wink to Minyan Brooks, who is now the proud owner of the Minyanville all-star guitar! Brooks took the scripted Fender home for $57,300 after winning our charity auction over the weekend. His generosity will help alotta kids through the efforts of Little Kids Rock, Free Arts NYC, Jacob's Cure and other worthy causes. Thank you Brooks--and thanks to all the Minyans in the 'Ville--we're a community that cares and it certainly shows.
It's hard to believe that we're already at the tag ends of another minxy year. 2005 was a confluence of market dynamics . While the mainstay averages fought for three yards and a cloud of dust , there were some serious sectors plays--including eye-popping energy, sparklin' metals and (near) all-time acne in the banks, brokers and trannies. There was the dollar which, despite a spate of sudden lethargy, put in a suprisingly strong showing. And, of course, there was compression, as volatilities flirt with twenty year lows and option premiums drip towards nothingness.
It was also a year of digestion, as Hoofy and Boo fought for the respect of price validation. The "big picture" was a pure push as we weighed structural (and growing) imbalances vs. the hopeful perception of years of fun in the Boom Boom room. The jury is out on that particular bout but that may be a function of the emerging yet unspoken societal acrimony. Indeed, while the flickering ticks fought it out in '05, the chasm between the "haves" and "have nots" seems to have crystallized.
On a personal level, 2005 was a mindful year as new beginnings and needed balance arrived on cue. After a first quarter financing, MVHQ celebrated the arrival of President Fish, Queen Vanessa, Pepe Depew and Jon "Chachi" Schwartz. We held a special retreat in Ojai, establishing Minyans in the Mountains as an annual pilgramage of human capital . The Ruby Peck Foundation, with considerable help from thy faithful, honored my granfather and strengthened our philanthropic roots. And there's the important stuff, which found white light on a few fronts and set the stage for a brand new page.
Santa vs. The Grinch.
I'm admittedly torn on the next two weeks although the ability to base above S&P 1270 will tip the scales towards Matador City . As psychology (peformance anxiety vs. trapped doors) remains top dawg in our metric mix, technicals provide a suitable framework with which to define risk (BKX 96 and XBD 200 are a duopoly to watch). While all (relative performance) eyes are on the benchmarks, plenty of opportunities remain as we scale down Mt. Minx (sector rotation and individual situations). Along those lines, and consistent with our recent real-time example, keep a close eye on pharma in general and Pfizer in particular as the late Friday Lipitor win prices itself in.
Beyond baby new year, I see metals and energy continuing to jockey for the leadership baton although either--or both--will likely endure several painful gut-checks. And yes, I see the acne in traditional leaders (trannies and brokers) and they could bode well for increased swell (Boom Boom style). That said, I sense that we're gonna suffer from a sharp (10%?) correction at a point this year that takes the VXO into the mid-20's. Call it the broken clock volatility shock as we've stayed compressed much longer than I would have thought.
Risk management and capital preservation will remain central tenets of any successful strategy as we truck ahead. The ability of the economy to endure the stress of a financed based, debt-laden mechansim is the obvious task at hand as we ween ourselves off easy money, fight an expensive war and stave off emerging isolationism. It's a steep climb but not impossible, particularly if debt proves elastic, rates stay low and home prices stabalize.
As for the 'Ville, we'll be rolling out our new and improved digs in early January and I'm quite certain you'll see why we're so excited. We're also hard at work improving the Buzz functionality and expect to implement those changes shortly after. Content wise, we're talking to some big cahunas about joining the critter mission and we hope to have more on that front quite soon. And, of course, the RP Foundation will shift its focus on the Critter's Choice Awards while MVHQ tries to meet or beat very high expectations for MiM3.
I'll be scribing vibe all week before sneaking away sans laptop on Saturday to practice what I preach. The 'Ville will be a bit chill next week as alotta professionals and professors focus on the important stuff and try this "working to live " thang. No excuses--just some honest discourse as we ready for a new chapter in the markets, Minyanville and Life. And on behalf of everyone at Minyanville, for those who are slowly sneaking out the side door, have a healthy, happy and enjoyable holiday season.
I'll see you on the Buzz. 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 email@example.com.
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