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Nothing is a mistake if we learn from it!


Good morning and welcome back to the holiday snack! The time has arrived for Festivus cheer as we ready ourselves for the final frontier. The bulls are still skating across golden pond and all eyes are on Boo as he sets to respond. "I know that the dough is a powerful draw," he said to his friends as he licked off his paw, "with sentiment skewed and traders in awe, the ice might be nice but it also may thaw!" Will the action heat up and fill the bear cup or will Hoofy just grin as he screams "giddy up!"? We'll know soon enough as we handle the chill and weather the storm with a warm cup of 'Ville!

Tis' the season for reflection and it shouldn't come as a shocker that I'm looking back as we peer ahead. 2004 has been a long haul for the critter crawl and as the only difference between mistakes and lessons is an ability to learn, the onus is on us to absorb the past as we ready for the future. The Minyanville mission is unique in that we're not trying to tell folks what to do. Rather, our goal is to provide the interpretation and information necessary to allow for a more lucid decision making process. Whereas other sites have egos, our community shares satisfaction. It is a subtle yet constant theme that has become the hallmark of the 'Ville.

With that said, and as I turn the magnifying glass inward, I wanted to offer an honest assessment of my eyes. I've been scribin' a vibe since 2000 and it hasn't always been the smoothest synthesis. While I'll humbly award myself an "A" for 2000 (better lucky than smart), 2001 slipped to a B+ as I was a tad early to buy the late Autumn meltage. Having spent 2002 building the 'Ville, I received an "incomplete" on the minxy course work during that (cough) time off. I was a bit (very) rusty upon my return, got blindsided by the bulls in 2003 but allowed for a D (rather than an F) purely as a function of perserverence and tenacity. And finally, as I look back at 2004, I underestimated the equity inertia but balanced that by being "all over" the metal/energy trade. I'll rate it a "C+" and chalk it up as yet another learning experience.

Where did I slip? I harped on the caveats of triple layered debt, the imbalances in the financial system, the lopsided sentiment extremes, troublesome (low) volatility levels, the funkiness of Aunt Fannie (FNM:NYSE) and the attendant derivative maze, the "signal" of insider selling, the impact of crude, the potential for a new FASBreality and the coordinated agendas in the marketplace. I maintain that all of these issues remain in play but as prices serve as the final arbiter, timing once again proved elusive and, therefore, early. Please keep these blips on ye radar as we mount the hump into 2005. The landscape is more fragile now than it has been in years.

While December is not yet over, the ability of the market to shrug off these concerns has been impressive. Indeed, if there was a constant theme to the bovine dream, it was the absence of motivation on the sell-side. Perhaps I should have respected the "thumbs up" in the corporate bond market a bit more (big snaps to the Horse) as it served as a precursor to the surge in buybacks and the spike in M&A activity. Or the mechanical liquidity that was force fed into the system, melting the greenback but buoying everything else. And how timing and the non-linear nature of the marketplace shaped the perception that dictated our reality.

It's been a long, hard road to get to this juncture and the path ahead must be paved with patience. Trends and trades will still offer opportunities but the field will remain frustrated. With a lot more spatulas chasing a shrinking pie, traders are hungry for profits and anxious to eat. That'll likely lead to a hedge fund bleed as shooters take aim at the same game and, in the process, take each other out. I've said it often and I'll share it again because I think it's so very important. The ability not to trade will be as important as our trading ability as we forge forward through the forest.

The week ahead will be chock full of chatter on a number of fronts. Beeks will swing by with leading indicators at 10:00 am this morning (exp. .1%), the mighty Bear (BSC:NYSE), Mother Morgan (MWD:NYSE) and Research in Motion (RIMM:NASD) will lead Tuesday's earnings parade, Micron (MU:NYSE) will dip its chip on Wednesday and Beeks will bookend the trading radar by releasing personal income (exp. .2%), durable goods (exp. .6%), personal consumption (exp. .3%), Wolverine sentiment (exp. 95.7) and new home sales (exp. 1.2mm) on Thursday.

Finally, and certainly not to be forgotten, the mighty Festivus will arrive on Wednesday night to celebrate another season of critters and children! The second annual Minyanville holiday auction will end on tomorrow's close and one lucky duck (plus a guest) will join Mr. Succo, Mr. Reamer, Mr. Collins, Mr. Erlanger, Mr. Schaeffer, Mr. Macke, Mr. Dwyer, Mr. Zucchi, Mr. Weldon, Mr. Santoli, Mr. Gula, Fokker, Ms. Dietzmann, myself and (just a few) other Minyans for a night never to be forgotten. It promises to be a magical Minyan menagerie and, as proceeds will benefit The Ruby Peck Foundation for Children's Education, the winner will walk away with memories, a "special" gift from the critters and the knowledge that they helped further our mission of giving something back!

Good luck today.


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