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The Art of War


Identify a proactive strategy that allows you to remain adaptive. Follow?


"War's going on across the sea
Street soldiers killing the elderly
What ever happened to unity?
It's like that, and that that's the way it is"


There are few topics of conversation that are as deep rooted and emotionally charged as September 11th and the war in Iraq. Each of us has personal memories and beliefs--some quite painful--and those typically manifest themselves in different ways. Minyanville isn't a political arena and we have been quite careful to focus our efforts on the financial mechanism. It is with those intentions that I pen this piece.

As we edge through the delicate geopolitical process, it's imperative that we remove emotion from the equation. When we have strong feelings that conflict with what we "see," it clouds the decision making process. And when what we see jibes with how we feel, it tends to embolden us even more. We must remain conscious of both dynamics as we edge ahead, for they'll likely intensify on either side of the curve.

We can't avoid politics as they craft the collective thinking (and policy) which, in turn, dictates market psychology. And we must be aware of the September 11 hearings and the possibility of a toxic impact on the mindset of America. There are a bevy of potential outcomes--and you can assign whatever probability you choose--but we've got to respect them all. Perhaps these debates will linger and morph into another Dallas schoolbook depository quagmire for generations to come. Who knows--I don't--but we must remain aware, if nothing else, that it's there.

With regard to Iraq, Dubya was quite clear that June 30th was his big fat line in the sand. From a trading standpoint, that now sets the clock into a T-minus situation as we edge towards that deadline. This may or may not prove to be an "actionable" date--remember, he stood on an aircraft carrier a year ago and told us the war was over--but in the financial community, the radars have now been calibrated. Once again, this isn't an opinion with regard to the course we've taken, it is simply an attempt to map out a strategy given where we are.

This discussion adopts an increased relevance given the psychological state of the marketplace. Many sentiment measures triggered more robust (read: giddy) readings during this past rally than they did at the height of the first bubble. That can permeate and inflate further (fueled by momentum and liquidity) but it also thins the margin for error. In other words, if everyone believes blue skies await, few folks will be ready should the red rain resume.

These aren't simple times and it's not easy to assimilate political science into the art of trading. There are a litany of issues and a heightened sense of tension when discussing them. And as we approach the coming months (and the November election), you can be sure that the debate--and the anxiety that results from them--will have an impact on the financial markets. That's not necessarily a bad thing as long as we're aware, alert and respectful of the powers that be.

Good luck.

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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

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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