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Tete-a-Tete

By

Hey Toddo, I hope they've got a couple of rooms left!

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Father, father, everybody thinks we're wrong
Oh, but who are they to judge us
Simply because their trade is long
Oh, you know we've got to find a way
To bring some understanding here today


(Marvin Gaye)


It was visiting day in the Minyanville Psychiatric Ward and, being the good guy I am, I swung by to see Boo on the way to last night's Lappy dinner. As Nurse Hatchet led me through a stark white hallway, I started to ruminate about how crazy this business is. Think about it: a community filled with metaphorical representations of various thought processes? That's a nutty way to spend a day!

I shook off the attention deficit and focused on the task at hand. My furry frazzled friend had freaked and I needed to coddle the confused critter. As we approached the rubber room at the end of the corridor, the nurse told me that I was on my own. I slipped into the room to find Boo in a straightjacket, staring at the wall and mumbling to himself.

Toddo: Boo. (pause). BOO! Snap out of it, dude, this is no time to lose your marbles.

Boo: The iguanas. They're everywhere. Did you see the iguanas? Watch out for the iguanas!

Toddo: (confused) Uhh...yeah, I see 'em Boo.

I walked around Boo, unstrapped him from his confinement, pulled up a chair and looked him in the eye.

Toddo: I know it hasn't been easy, my friend, but you've gotta keep the faith. There's a huge difference between hope and faith and no matter what happens, you gotta believe in yourself. A shaken trader lacks confidence and once you lose confidence in yourself, you're toasted almond.

Boo: It's brutal, Toddo. In all the years I've been dancing around behind your eyes, I've never been as chilly as this. I come to play every day but nothing seems to matter anymore. Good news, bad news, support, resistance, talk ups, talk downs, pick ups, put downs -- the Minx doesn't give a schnitz!

Toddo: Boo, remember a conversation we had earlier in the year when the averages were melting in the muck? We discussed the potential bullish phases would inevitably and eventually emerge. Remember that? I told you that when it happened, it would look and feel like we turned the corner and I, Mr. Grizzly, would feel as if I missed the boat. Sure enough, it looks, smells and feels like an upside duck and, true to form, the "pundits" are quacking it along.

Boo: But they've been right, haven't they?

Toddo: Yes, there is no denying that the market is higher and the bulls have made money. That's not my point. We've had these same discussions for almost three years and when the averages are down, people tend to listen. After a rally, however, everyone is quick to discount the bear case and put it behind them. Lemme me assure you, Boo, the very fact that SO many people are constructive on the market/economy is potentially the most bearish element out there. The Investor's Intelligence bull/bear was released this morning and there were 54.4% bulls (vs. 54.8%) and 23.9% bears (vs. 24.4%). Do you know when I'd start to rethink the bear thesis? If there were 54.4% bears!

Boo: Isn't that a broader guide rather than a trading tool?

Toddo: Yeah, pal, it is. And I'm not gonna discuss the complacency (VIX) or extended nature of the tape because, quite honestly, people are probably tired of hearing about it. While the momentum is clearly to the upside, it's worth noting that there's been a decent amount of buying INTO tomorrow's economic barrage. Also, there's been a lotta chatter that Dell (DELL:Nasdaq) is gonna raise guidance when it releases earnings. I'm not involved in the stock (at present) but it's worth noting that expectations are high.

Boo: But what if we're wrong, Toddo? What then?

Toddo: There's no blanket answer for how to approach the market, Boo, and each Minyan has unique circumstances. My only point is that you gotta shake it off and remain lucid. If you're too big, pare back. If you've got a view, make sure that your risk-profile matches your time horizon. I've got a couple of strategies in play right now. I own a smattering of June puts and have rented some June calls as an upside hedge (drug/consumer names). The risk is defined both ways. I'm attempting to play a rotation and the gamma allows me to trade 'em as I see 'em. I've also got a schnitzel of Sept/Oct puts that I'm "putting away" for a rainy day.

Boo: Coolio man, and thanks for helping a brother out. Hey -- what ever happened to the Minyanville all-time best rock and roll band poll? Did Slacker ever finish the list?

Toddo: Yeah, he actually did a good job and compiled a Top Ten. Understand, however, that the Boss, Santana and Jimi were omitted as we deemed them to be individual artists rather than bands (in the classical sense). Here it is: #10 Pearl Jam. #9 AC/DC. #8 Eagles. #7 Pink Floyd. #6 The WHO. #4 (tie) U2 and the Grateful Dead. #3 (cough) The Stones. #2 Led Zeppelin ...

And the #1 best all-time rock and roll band, as voted by the Minyanship....The Beatles!

Boo: That's awesome! Hey, how bout we have some fun today Toddo. Let's do a poll among the Minyans -- what were the all-time WORST bands? Have the Minyanship send their votes to Fokker@Minyanville.com and we'll announce the results tomorrow. Hey... you know what? I feel better already! Thanks for the balance and perspective, Toddo. You da man!

Toddo: No, Boo, you da... uh, yeah. Just do the best you can and let the chips fall where they may.

I looked at my watch and realized it was time for dinner. The pseudo preppy-something-about-Mary-gel-wearing-Jen-abiding-always-smilin'-sushi bitin'-customer-fightin' Lappy was waiting, and being late has always been a pet peeve of mine. I got up, gave Boo a hug, took him by the paw and led him out the door. The salmon sashimi was waiting and my furry friend could surely use the nourishment. Besides, there's nothing better than spending time with some old friends -- it's good for the soul.

Good luck today.

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