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Vision Quest

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Learn from others and "see" for yourself.

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I'll run in the rain till I'm breathless
When I'm breathless I'll run till I drop, hey
The thoughts of a fool's kind of careless
I'm just a fool waiting on the wrong block


(Led Zeppelin)



I sat down to scribe my morning vibe and arrived at a place of "what now?" After all, the financial landscape hasn't substantially shifted overnight and the Monday meander left us with more questions than answers. Was the January scrub a simple pimple in much broader bovine complexion? Or has the recent run effectively distributed rose-colored glasses to those in need of technical affirmation? The mainstream media will assign reason for either rhyme but proactive decisions are the only way to profitable positioning. And therein lies our task at hand.

I, like you, constantly assimilate the landscape and try to surround myself with intelligent inputs along the way. There have been times when I've prospered from this process and others when I was viciously reminded that nobody is smarter than the market. In the end, the common denominator is discipline and the ultimate arbiter is time. As any trader can tell you, the only difference between being wrong and being early is whether you're there to see your horse come in.

I remember watching CNBC run a story about how Julian Robertson and Tiger Management were hamstrung in the spring of 2000. The market was ripping hand over fist and stock jockeys were tripping over themselves to buy anything with a ".com" on the end. Julian had made a large bet on the "old economy" and shunned the hyperbolic frenzy of the new paradigm. He was right to be suspect, of course, but he wasn't positioned to prosper from the eventual validation. "In an irrational market, where earnings and price considerations take a back seat to mouse clicks and momentum," he said at the time, "Logic, as we have learned, does not count for much."

What we have learned is that there will always be deductive rationalization when it comes to the markets. Back in the day, when page views turned to eyeballs in the absence of earnings, analysts would invent metrics to measure the growth of the internet. We may be a long way from those heady days but that mindset remains very much in play. Folks come to Wall Street to get paid and if you're not on the northbound train, you might as well be under it. Unfortunately, for many outsiders looking in, the only voice they hear are the conductors in the brokerage community or the engineers on television.

I've learned to respect the Matador Crowd and appreciate the fact that we may be edging through an echo bubble. As long as no distinction is made between strong economic growth and a debt induced consumption binge, that perception will remain our reality. But my grandfather taught me to respect my elders and if Warren Buffett, George Soros, Jim Rogers, Jim Grant, Jeremy Grantham, Bill Gross, Sir John Templeton and other smart cookies are keeping their right hands up, I'm gonna think twice before swinging wildly. That may cost me relative performance in the near-term but it'll keep me alive long enough to see advantageous opportunities.

Good luck today.

R.P.
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