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Random Thoughts


That, my friends, is the stuff of life.

  • Let the games begin! As President Fish and young Billy Meehan sport their Mets garb, Chachi and I are now officially in business. This should be a very interesting October at MVHQ.

  • Keep an eye on commodities, cookie, they're starting to get some pep in their step after bouncing at CRB 300. And not just the obvious players either. While crude is up a percent and the metals are starting to jingle, cocoa is 4% higher, wheat is 2.5% better, corn is up a deuce and soybeans are ahead by 1.5%.

  • Is this the script if the commodity complex is revived?

  • The best thing Hoofy has going for him (other than Daisy)? The brokers, which are stronger than a mule's breath.

  • The brightest star on my radar? Tomorrow afternoon's trip to Baltimore to play Super Uncle to Maia and Brad and spend the holidays with my brother. That, my friends, is the stuff of life.

  • Talk on the Street is that Amaranth has been unwinding a large convertible debenture position in Golden Star (GSS), which is one of my holdings in the space. I nibbled on the name yesterday --you never know how much supply remains in the wings--and will continue to do so as a function of time or price. The risk to this position isn't one large seller, in my view, it's a broader deflationary softening. That could happen--or, should I say, it is happening, but I still want sponsorship in the space with a longer-term horizon.

  • Bubble me once, shame on you. Bubble me twice, shame on me.

  • Keep FedEx and the trannies on ye radar as well, as the latter is nestled between three important technical tickles.

  • Over at the Food King, there's rumblings that something is afoot. Minyan Michael asks whether Wal-Mart's decision to cut generic drug costs just blew the models of Walgreens (-6%), CVS (-4%) , Kroeger (-1.5%) , Safeway (-3%) and the like. I don't do drugs but I know other professors are plugged into the space. What say ye?

  • Come on Down! You're the next contestant on The Price is Right!

    There are three ways to look at the world right now.

    • "Thailand, Amaranth, Deflation, the Middle doesn't matter 'cause the tape is shaking it off. Must be a wall of worry as we know that reaction to news--rather than news itself--is what we need to watch. Just wait till we break out to new highs and the technical buyers step in."

    • "The commodities are telling you all you need to know about world demand. That, coupled with articles like this and charts like that, tell you all you need to know about what's coming down the pipe. Toss in the uber-low levels of volatility (VXO 10-handle) and you've got a recipe for smack dabbage."

    • There's a distinct possibility that the first bullet is right--and there's a real risk that the second bullet will come to fruition. Our task, as risk managers, is to proactively position ourselves in a manner consistent with the spectrum of outcomes. Discipline over conviction, take what the tape gives you and don't let promises of the bigger, better thang dominate your mindset.

I think (hope) that all Minyans understand which curtain to choose.


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position in gss, metals, energy, financials
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