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Best of 2005: Class Clown

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Why can't we be friends?

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Editor's Note: This article was published on 6/21/2005

"Why don't you call me sometime when you have no class?"

--Thornton Mellon, Back to School



It's been a quiet storm of late in the financial markets as the slow summer season slithers through June. To the casual observer, the action has been unremarkable save certain sectors and situations that have offered outsized opportunities. To be sure, those weighted in energy or, say, Google have quietly smiled their way through 2005 and made hay in the sunshine. But while rays of profitability offer warm spots in an otherwise cold industry, dark clouds have edged to the periphery of our collective existence.

Last year's election brought the dichotomy between blue states and red states to the forefront of the mainstream mindset. But a more disturbing conundrum has evolved that has little to do with party lines or political affiliations. As we edge through the post-bubble world, the growing chasm between the "haves" and "have nots" is becoming readily apparent. Indeed, while the names have changed to protect the affluent, the middle class has quietly eroded and forged a wedge between the lifestyles of the rich a struggle to exist.

Those of us who grew up on Wall Street wore CAPITALISM across our chest like a badge of honor. Meritocracy and financial acumen differentiated our existence and afforded us status in a white shoe world. The dot.com frenzy bridged the Benjamins to a separate sector and spread the wealth to Silicon Valley. And now, in what is likely the last hurrah at the Bubble Spa, housing has become the enabler of paper trades and happy trails. Yes, for some, life is very good indeed.

Meanwhile, on the other side of the tracks, a squeeze of a different breed has emerged. Wage growth is stagnant, healthcare and fuel costs are rising, education expenses are escalating and our manufacturing sector is being outsourced. And despite the recent rally by the gritty greenback, the affects of isolationism continue to sequester our relative global standing. When the going gets tough, as our European counterparts have recently shown us, the tough tend to take care of themselves.

I've often opined that the stock market is the world's largest thermometer and reflective of our collective health. The good doctors at our central bank know this, of course, and have taken great strides to supplement our organic ecosystem with artificial stimuli. The imbalances have been bubbling under the surface for some time but they're now starting to percolate in the socioeconomic arena. This has profound implications as it will continue to evolve until it reaches the critical mass that is deemed to "matter."

What can you do? Be aware and alert of the evolution around you. Save when you can and stay out of debt. Diversify your holdings and explore alternative currency vehicles. Make capital preservation a priority and don't get caught up in the next best thing. Be mindful of our good fortune while being realistic and proactive. Don't let your net worth dictate your self-worth and, above all, enjoy your journey.

Tomorrow, as we know, is promised to no one.

Good luck today.

R.P.

No positions in stocks mentioned.

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 todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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