Random Thoughts: FOMC Confusion, Are We in a Bull Market?
By Todd Harrison Sep 11, 2007 11:27 am
...sometimes not investing in a sector as a function of redundancy is the very best investment.
- What am I doing today, on top of the incessant trading, writing, building, calling, typing, talking, watching, waiting, wondering, reflecting, inspecting and juggling that I usually do? Being extra kind to strangers, communicating affection to friends and family and making a concerted effort to help those less fortunate. In short, I'm trying to morph this from a "sad" day to one that affects positive change.
- Yesterday, we noted 5 Things--no, not like that, like this! Goldman, Intel, the long bond, Wal-Mart and Countrywide. They continue to be guides to the ride as we toggle with Tyler.
- So, the FOMC is divided in how to address the credit crunch and employment drop? Shocker, eh?
- I'm not being saucy, I'm simply noting the confusion as Fed credibility--and "belief" in general--is the single most important metric right now (and yes, I'm aware of how incredibly important the structural metric currently is).
- Denial, Migration, Panic. The more I hear how sure folks are that we won't see a recession, the more likely it becomes in my humble opinion.
- Riddle me this: If the DJIA goes up 10% and the dollar drops 20%, are we in a bull market?
- No? So how do you resolve the fact that, since the beginning of 2002, the S&P is up 24% while the dollar is off 30%?
Pete and Repeat? Many snaps to Minyan Peter for the continued tutelage in the financials space. His take on Bank America is good food for thought.
- Why does this story remind me of Ruby?
- Billy, don't be a hero! Joseph C. Lewis, the billionaire that bought a chunk of Bear Stearns, is obviously a lot smarter than I am (hey, he's a billionaire!). That said, I think he's WAY early in terms of his long-term strategic stake. Just one man's humble opinion.
- Circle December 7th in NYC and I'll forward details as soon as President Fish unties my tongue.
- I recently heard someone say that "financials must be a part of any portfolio." That might be right--time will tell--but I'll offer that, in a finance-based economy, equity holders likely have a fair amount of financials already embedded in their book. We talked about this in June, before the turmoil kicked in, as a secular theme rather than an isolated incident.
- There's a different between trading and investing (time horizon) and, along those lines, there is risk to the short side (perception and emotion into the rate cut). However, I continue to feel that risk outweighs reward in the financials over the long-term. And for those looking to dabble in the short-term, please see the two downtrend lines that are quickly approaching.
- Sometimes the ability not to trade is as important as trading ability. Ergo, sometimes not investing in a sector as a function of redundancy is the very best investment. Just one man's humble opinion.
- The Minyanville community is, in a word, powerful. Many kind thanks to the multitudes of Minyans who have weighed in with kind thoughts today. It does not go unnoticed.
- There here and now? Breadth is 2:1 positive, the financials are continuing their bid from yesterday (as sentiment (and Fed futures) begin to assume a 50 bip cut next week), the semis still feel heavy and beta is mixed (Apple is notably heavy).
- Stock Tease! Also note that the S&P is again flirting with the 200-day moving average at 1460.
- My sources tell me that alotta hedges are on (into the FOMC), which should lend a layer of support. For what it's worth, and while I covered my shorts into Friday's malaise, I'm looking for entry points on the short side.
- In a perfect world, it'll come after the cut but alas, the world is far from perfect. Plus, as I'm outie Thursday through Tuesday, I'm not inclined to toss on monster size. Just "keeping it real" as we figure it out.
- Good luck today, Minyans, and remember that there's a huge difference between loss and loss. Today, more than ever, we should remain mindful.
No positions in stocks mentioned.
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