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Troubled Automakers, Smoothed Earnings and other Breathless Headlines


"Coleman, I had the "worst" nightmare... I was poor and nobody liked me."


I'm hosting Squawk Box next Monday morning and I've got a bit of a problem. Mike Santoli touched on it last night, indirectly, in the notes from a Minyanfest dinner. The financial media, in which I dally to the extent that they invite me (but don't yet feel as though I'm "part of"), has sort of a hard time understanding the notion of not being long or short.

I'm supposed to "make viewers money", ideally by talking about some stocks which I'm "buying in size", "loading up on" and "pounding the table". If I want to be somewhat unusual I can talk guardedly about the falling sky and shorting opportunities.

But I'm just not feeling either of those. I'm feeling like I have some longs I'm not inclined to sell but don't see set-ups. The videogame makers into the hype of next week's e-3? Eh.... I'm long some Activision (ATVI) but not big. I think they are closing the gap on the suddenly crooked-shooting Electronic Arts (ERTS) but I'm not inclined to be a hero until the Street comes to grips with the fact that the console switch is here in an angry way. Unless Microsoft (MSFT) is releasing the Xbox2 next week, nothing that comes out of e-3 is going to save the numbers for this year. (NB: Even if Sony (SNE) announced the release of the PS3 for Friday it wouldn't be in stores until '07)

The short side? I shared the Apple (AAPL) positioning and thought process yesterday, and I see the way Boo has become Daisy's main-squeeze Mack-Daddy, but it feels a bit late in the game to be putting bearish bets to work across the board. I appreciate Bill Gates recognizing the i-pod's Pet-rockness, however late to the observation though he may be, but I'm not putting more money to work on the short.

I could poke at Wal-Mart (WMT), speaking of observations that are suddenly widely held. The company and stock chart are clearly broken and, gun to head, the stock most likely works lower in the big picture. But I don't like the risk / reward set-up on stocks that people have loved for so long. When I turn down the television today I can actually "hear" brokers soothing clients on the name and suggesting that "you have to buy the dips on these great companies". Too hard.

The feeling is roughly akin to how I feel when it comes time to order the meat at the kind of testosterone-oozing dinners Todd-O described this morning. One guy will tell the waiter to "just slap the cow on the a** and walk it out to my plate" as a colorful description of rare. The next will order it "cremated and piled in an ashtray" for well-done.

I like my steak medium and I don't like the market, long or short. I feel much more passionately about the latter but it's a conversation killer, as the financial media is currently wired. At least you can simply order meat with a humiliatingly banal "medium" and move on to other topics. People just don't accept "sidelines" as an investing choice.

Which is actually a pretty good argument for remaining there, boring though it is.

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Positions in Apple, Activision

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