Happy Birthday big guy!
Good morning and welcome to the 'Ville. I would like to begin today's column by honoring the man who taught me that being tough and being kind aren't mutually exclusive endeavors. A man who lived his life by a code, prided himself on his spoken word and never took his good fortune for granted. A man who dropped out of seventh grade to support his family and established himself as a captain of industry and the president of his company. On this, what would have been my grandfather Ruby's 88th birthday, I would simply like to remember that the worst parts of him remain the very best parts of me.
With that said, and with love in my heart, I can begin my day with the proper perspective. The timing couldn't be better as I--like you--have been watching each tick as if it held the secrets of tomorrow. The simple truth is that there is no magic formula to trading, only an assimilation of information that we hope will provide an advantageous risk/reward dynamic. And even when the ducks align and flash the "all clear" signal, we must continue to keep our right hand up.
As discussed in recent columns, the path of least resistance is a polar express as our primary metrics point higher. Yet, as Jason Roney mapped out on yesterday's Buzz, there is a historically probable chance that today's fray reverts to Red Dye. If and when that happens, the media magnates will point to crude, the dollar or a number of other ursine elements. That's the way it is on Wall Street, dynamically elusive but always obvious with the benefit of hindsight.
The chatter that Johnson & Johnson (JNJ:NYSE) may gobble down Guidant (GDT:NYSE) underscores what the Iron Horse has been saying for months. That through this entire move, corporate bond investors believe that the economy and profits will continue to grow (and are acting accordingly). He'll be the first to tell you that credit spreads aren't fail safe--nothing is--but they've historically widened before stocks hiccup. And while they clearly won't help equity holders should an exogenous shock hit, they do offer another filter as we sift the noise from our poise.
We power up this frisky pup to find Japan sluggish (note the six month pennant), Europe firm, the dollar retesting the abyss and mixed metals. Stateside futes have one hoof in Matador City but the action has been more of a rotation than an outright migration. I still think the financials hold the key to the vault (BKX flag?) but will keep one eye on beta (Google (GOOG:NASD) as they catch their breath. If the performance anxiety upgrades to a full-fledged panic, the four-letter names will be the obvious vehicles of choice.
On the housekeeping front, I wanna share a coupla vibes. First and foremost, the biggest announcement in Minyanville history is in the works and remains a function of many moving parts. While I was hoping that it would be this week's business, I've been force fed patience over the years and understand that it's more important to do it right rather than quickly. Soon 'nuff.
With regard to the auction for a seat at the Minyanville holiday dinner (with most of the professors on December 22), we'll likely launch that this week with the proceeds to benefit the Ruby Peck Foundation for Children's Education (nice!). Finally, and just so ya know, I'll be taking my first real vacation in two years starting December 23 and lasting through the new year. I know it's incredibly selfish but if I don't juice the batteries, the critters will be very disappointed!
Good luck today.
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