Editor's Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
Prof. Succo -
Yes the press and teletubbies can pontificate all they want but any way you look at it these events don't help the bulls. We both agree the timing is unknown but overall it just can't help their case. What is stunning is the lack of concern - 80% of the people in the business don't think we have a problem.
The exhaustion theory is interesting and could prove correct, but I have to say when the markets basically brush off terrorist attacks because 'they are not as bad as 9/11' I have to scratch my head. The dip buyers just won't give up. At some point we risk they will drive all the 'good' managers out of the system. Then the bubbles get bigger and eventually they pop though who knows who will be still in business.
I tend to agree that money is being distributed in the market, however slowly, it is happening. What I can't figure out is what will make the mo crowd throw in the towel. They got 10% last year by jamming the last two months of the year remember. They ripped up off April's low this year like it was nothing. And worse, the most speculative issues perform the best! Anecdotally one of my largest positions (I run a highly concentrated portfolio) is Automatic Data Processing (ADP). Whether you think the company is cheap or good is irrelevant, it is certainly at least average. On a daily basis the stock under-performs the broad markets. I own Microsoft (MSFT) as well and that too consistently under-performs. No again I am not saying those are the greatest or cheapest companies out there but they are certainly NOT below average.
The entire situation is very frustrating. Either way I enjoy your work - keep it up.
position in adp & msft
I actually think that this attack is worse for the "markets" than 9/11 (please don't take that as a comment that dilutes any feelings I might have of loss or anger at what was done on 9/11, I am talking only of the effects on the markets).
This attack illustrates a coordinated effort to undermine commerce. If economies begin to more fully discount the ability of terrorists to affect commerce, this will dramatically add to the costs of conducting commerce and should affect asset prices in the long run much more than 9/11, which was previously, over time, conditioned into a "one time event" by the markets.
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