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Random Thoughts


Quick hugs are nice but I'd prefer a lasting relationship.

  • Shot-gun marriages? The proposed mergers in the airlines and online brokers feel somewhat forced and defensive in nature. Fees are fees, of course, but I think it makes sense to look at the underlying motivation behind some of these unions.

  • I noted on the early Buzz that the combination of jiggy internals and firm financials bode well for Hoofy's Heroes. I'm still viewing lifts as fleeting treats but I'll always respect the tea leaves.

  • I wanna trade like a Winky Wright jab.

  • Hedge hogs!

  • There was a Barron's article this past weekend extolling the virtues of Citigroup (C) on the long side. I humbly disagree. My sense is that there are two reasons to be long the financials-continued liquidity and the specter of economic growth (steepening yield curve). There are, however, a litany of reasons to avoid this company-flattening yield curve, credit risk, shrinking brokerage margins, regulatory concerns, real-estate risk (have you seen how many Citi-superstores have popped up throughout Manhattan?) and some rather nosty looking dandruff.

  • Levels to monitor as we edge along our minxy path? NDX 1483 (200-day), S&P 1140ish ('05 lows), S&P 1159 (200-day), XBD 139 (200-day), SOX 407-410, DJIA 10,400 (if and when), Gold $410 ('05 low) and $422 (initial resistance), OSX 124.50 (200-day), CRB 289 (200-day).

    While these all "matter" in their own way, please pay particular attention to the commodity related indices. If the dollar retraces and tests its acne zone--textbook type stuff--there may be some attendant snappage in "material type" sectors.

    That may be tomorrow's business (turnaround Tuesday?) but it's worth tossing on ye trading radar as we dig in and double down on our morning cup of 'jo.

  • Along those lines, I vibed this morning (on the Buzz) that the drillers looked primed for a Snapper as a function of the looming 200-day support and a reversal (lower) in the dollar. That hasn't happened yet (the dollar hasn't flipped the switch) but it remains on my radar. For purposes of educational communication, the OSX was trading in the 123 handle when I shared the eyes.

  • Lemon Aide.

  • "The highlight of the week, however, was a dinner hosted by our good friends at In attendance were 18 of Wall Street's best and brightest minds. While there were many topics discussed, the conversation ended up centering on managing risk. Plainly, everyone knows how to win, but few know how to lose. Yet knowing how to lose, how to manage the risk, is the key to any successful long-term investment operation. Clearly the investment professionals attending the dinner understood managing risk, but amazingly many of their counterparts do not. Indeed we were shocked when one savvy seer noted that he had asked over 1000 portfolio managers if they ever used "stop loss" orders and none of them did!" -- Jeff "As Good as it Gets" Saut of Raymond James

  • Hugs not drugs?

  • Please stay tuned for my speech on the pitfalls of peanut M&M's.

  • Take a bite outa crime!

  • So...if recent history is any indication, a stronger dollar isn't equity friendly from a price/demand standpoint. But what about the implications for the fundamental landscape? Large multinationals rode "currency gains" through 2003 and the mirror image-if it continues--could make for a messy scrimmage.

  • What's next, Elmer's Brew?

  • "Sentiment is a Pimple Ready to Pop - Investor's Intelligence data show market newsletter writers are still too bullish and the Bulls less Bears indicator is not low enough (market lows usually coincide with this indicator in single digit or negative numbers; currently it is 18.2) to imply real concern. In addition, we've gotten some anecdotal information of late that suggests some hedge fund investors are playing it pretty cute right here -- "We're in for a big rally in equities...I've covered my shorts...growth estimates have been revised up...inflation is subdued...a strong dollar is good...lower oil is good...the market is short and will need to cover." Seems to us like people are pretty constructive here. If the market weakens, as we suspect it will, this sentiment pimple seems ready to pop." -- Uber-Minyan John Roque of Natexis Bleichroeder.

  • Sun set?

  • Imitation is the greatest form of flattery.

  • "This morning, once again, I find out how differently I look at things than the rest of the world... The Net foreign purchases (inflows from foreign sources buying U.S. securities) was significantly below expectations with especially China and Japan showing decreases. This is truly alarming for me, but apparently not to anyone else. On top of that, over $32 billion of purchases came through the Caribbean. This is supposedly hedge fund money. Hedge funds buying $32 billion in treasury securities in one month is truly amazing. I am going to say it here: I flat out do not believe this is straight hedge fund money. I can't say what it is without more concrete evidence, but I can say that I believe it is non-economic buying. This furthers my belief that the U.S. has put itself in an economic untenable situation." -- John Succo on today's Buzz

  • I've heard of a bull in a china shop but a deer in a bear den?

  • "It's certainly possible that there are more accidents waiting to happen in unknown corners of financial markets. After all, that's typically the way it happens when new, untested financial instruments are thrown together with increased leverage and a tightening cycle."

  • Video killed the radio star? Perhaps, but Fish, Collins, Macke and I spent Sunday at Serendipity and arrived at the notion of Minyan Radio. It seems relatively straightforward in my "always three steps ahead" keppe. Set up a half-hour daily vibe session, web cast it on the 'Ville and shop it to the satellite spectrum. Seems like a fertile vertical for the Minyan mission!

  • Enjoy your journey today.

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