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Californina Dreamin'

By

I did NOT have sexual relations with that woman!

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(note: those depicted in this column did not actually participate in the discussion)

It's an active morning in Minyanville and the town is abuzz over the big news. Evidently, in an effort to join the "it" crowd, Sammy decided to enter the California Gubernatorial race! Last night, on the Late Show with Tony O'Schnitzel, the main candidates gathered for a spirited debate. It went a little something like this:

Gray Davis: I don't understand why, all of a sudden, everybody jumped into this race. I think I'm doing a fine job.

Gary Coleman: Whatchoo talkin' 'bout Gray Davis?

Larry Flynt: I have no idea Arnold, er, Gary, but he's obviously not thinking with his noodle!

Ah-Nold: He didn't take he'z vitamenz.

Sammy: (scanning the group) I don't know about that, but I decided to toss my bowtie into the mix because in this arena, there's no black or white--only shades of Gray. Politics are a lot like the stock market--there are a ton of issues and rarely a clear answer.

Gary: As somebody who's short, I'll tell you that I'm pretty nervous. The S&P (965) and Dow (9000) have held, the bonds have stabilized, a lot of my stochastics have "hooked up" and, for the first time in a while, some bears have been pressing.

Larry Flynt: Well, I seriously doubt we get a stiff rally from here. I mean, the technical deterioration (point & figure) is an unemotional negative and, while I don't know if I'd want to be naked short, I wouldn't be surprised by some equity flaccidity.

Ah-Nold: Oh, ze'll be bahak! Zis iz America!

Sammy: (clearing his voice) As an independent, I can tell you that there are always two sides to every story. The issue I'd like to address is timing. Yesterday, the Minyanville Gazette featured a lively discussion on that subject and, depending on the horizon, both the bulls and bears may end up being right.

Gray Davis: That's a very political response.

Larry Flynt: I think it's sexy!

Sammy: Not every decision of every trading session needs to be sexy. Trading is about assigning probabilities to potential outcomes and identifying an advantageous risk/reward profile. My friend Boo will argue that good news is discounted, stocks are fluffy, caveats remain and new lows are a matter of time. Hoofy, meanwhile, is pinning his hopes on the liquidity fluidity we've witnessed to date. Both critters have a plausible argument but one of them is gonna be rudely disappointed.

Ah-nold: So Hoofy vants to pump dem up?

Larry Flynt: He's pumped more than I have this year! A fairly robust recovery is already priced into the market.

Gary Coleman: That's not what Willis said--but then again, he was gettin' busy with Kimberly at the time.

Sammy: The bottom line is this: before you assume any exposure in the marketplace, identify a horizon, understand the two-sided risk and always--ALWAYS--allow for a margin of error. The simple truth is that there is a range of potential outcomes that could unfold. It's entirely alright to have an opinion but it's not cool to bet the ranch on any one scenario. That's my platform, and it's what I plan on running with.

Ah-nold: I've heard enough! Maria, fire up the jet!

The candidates eyed each other nervously as the big fella stormed out of the building. Sammy, meanwhile, calmly slithered off the podium and exited stage left. Gary, Larry and Gray? They were headed back to the Flynt residence for a cigar and some late night shenanigans. They were, afterall, politicians. Are you really that surprised?

Good luck today.
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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 todd@minyanville.com.

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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