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Cuckoo Clock


That bear is n-u-t-s nuts!


"Well, the real reason that you've been sent over here is because they wanted you to be evaluated... to determine whether or not you are mentally ill. This is the real reason."

--Dr. Spivey, One Flew Over the Cuckoos Nest

A mutterin' stutterin' Boo, wrapped tightly in his straight jacket and sitting Indian style in the middle of a rubber room, has had some issues of late. The other critters, concerned by his erratic behavior, took him to the Minyanville psychiatric asylum for an emotional evaluation. As he stared intently at the iguanas, Nurse Ratched entered the room (with two large interns) and sized up the young bear. The conversation went a bit like this:

Boo: Which one of you nuts has any guts?!? Unleash me, I say, unleash me or there will be hell to pay!

N.R: Boo, we can discuss your issues and you can take your medicine orally or we can arrange for you to have it some other way...

Boo: Are you kidding me? I've been taking it the "other way" all year long! What's worse, the other critters are taunting me! Hoofy hammered me in the spring, Sammy sapped me all summer and now Snapper is mocking me something silly! What is wrong with this world when the only critter that hasn't screwed me is Daisy?

N.R: Why do you feel such a sense of inadequacy?

Boo: Case in point, Mildred--yesterday they smoked the dollar which, in my estimation, is a long overdue accident waiting to happen. I mean, it's basic economics, isn't it? The more greenbacks that Elmer prints, the less valuable they are. You know my thesis--dollar devaluation will lead to 'imported inflation,' which, when coupled with sluggish economic growth and rising unemployment, will ultimately end in a state of stagflation. Am I the only one that sees this? It's a goddamn marvel of modern science!

N.R: Boo, you're confusing the issue here. You may be proven correct, but for purposes of trading the market, who the heck cares? Now, if you told me that the brokers broke (in the face of good earnings) or the breadth is turning (after the morning yearning), I'd say "hey, this bear may be on to something". Heck, you can even argue that the massive S&P put selling on the opening jammed the tape higher and now, as the morning evolves, the macro hedge funds are selling futures 500 at a clip. THAT is pertinent information. The other stuff, while it may be proven right, has been wrong as an N'SYNC song.

Boo: It's been wrong because it hasn't been a focus, I'll give you that. Nobody focuses on the negatives when the tape is rising just as few saw the potential positives when we were massively oversold. Haven't we learned anything in the past four years? The time to focus on risk is when the market is extended, not when it's on its heels. For some reason, more people now fear missing the next bull market rather than what can go wrong. That's my job--I'm a bear--and I've gotta tell it like it is.

N.R: That's fine...but you've gotta remember to assimilate your metrics and exhibit discipline on the short side too. The market, while extended and lopsided, has broken out and performance anxiety, while manic, is a powerful animal. Timing is everything, Boo, and you've gotta respect the stacked deck. While we're in here talking about your well being, the market is hanging tough and digesting the recent noise. In fact, the breadth in the Nazz is a frisky 8:5 positive. That's something you should respect if you're gonna game a wreck. Now, I'll let you out of your restraints but you've gotta promise that you'll play nice with the other critters!

The two interns unleashed the bear and, after shooting them both a nasty glance, Boo shot out the door. He knew that he faced an uphill battle and the collective agenda wanted to see a higher market. He also knew, however, that hope isn't a viable investment vehicle and, at a point, viable end demand would have to replace injected liquidity. As he ran down the driveway and made his way towards town, he looked back at the imposing institution that sat on the hill. It was one place, he decided, that he didn't need to see again.
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

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