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Freaky Friday Potpourri: Darkness Before the Dawn

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Take a deep breath and a step back.

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It still feels foreign to step away from the fray during market hours yet that's precisely what I did yesterday afternoon. Between a dizzying array of e-mails, incessant information assimilation and the flickering, bickering ticks, my head was spinning. I got up, went downstairs and walked around the block.

Interestingly enough, the sun was shining and people were alive. Heck, some of them were even smiling. I took a deep breath, looked up at Ruby and gave him a wink. Alas, he's the moral mentor who taught me that no matter how bad things get, even at the darkest hour, this too shall pass.

It's easy to get caught up in the malaise-the all encompassing, engulfing malaise-particularly when we make our hay in the nuts and guts. I'm not sugar coating how bad things are or how risky this juncture is through a historical lens. I'm simply saying that perspective is necessary, now more than ever.

We offered that time and price were the only true arbiters of our financial fate as this social bubble built and we'll remind you of that now. As discussed yesterday morning, one of two things will happen: A game changer on the regulatory front or... well, game over.

I've shared my view on where I stand and it's out there for all to see. And should S&P 600 arrive, I'll transition 25% of my long-term nest egg into equities. That doesn't make it right; it simply makes it one man's humble opinion.

Where you stand is a function of where you sit. Play within your means, only risk what you can afford to lose and above all else, if your head is spinning, take a walk around the block.

Sometimes a ray of sunlight can go a mighty long way.

Random Thoughts:

  • This is no time to be the Greatest American Hero (or The American Dream, for that matter) but I nibbled into the nausea yesterday, accumulating some financial crack (FAS) (cost basis roughly $3) and General Electric (GE) calls (defined risk, with an eye on Martin Brodeur).

  • Remember when Martial Law was declared and we traded Back in the U.S.S.A.? We said that it's never wise to mess with Mother Nature and after that, she was really pissed. I think it's safe to say she's in the process of exacting her pound of flesh.

  • While the last leg of a trading phase-which is very different from a secular shift-is the most violent, we must remember that news is worst at (or near) a trading low.

  • Citigroup (C) is a penny stock, General Motors (GM) has been fitted for a toe tag-heck, even Warren Buffett's (Berkshire Hathaway (BRK-A)) credit default swaps are blowing out! Toss in some darkness, vermin, blood and frogs and this cleansing will officially be of Biblical proportions.

  • When we spoke about S&P 600 many moons ago, it seemed so far-fetched. At the time, I'm sure folks quipped, "Yeah, sure, I would buy 'em there too!" Take this to the bank, Minyans-if and when we get there, buying 'em will feel like the wrong decision. Ironically, that could be why it's right.

  • How wrong did it feel to sell-let alone short--the market when she was giggling at all-time highs?

  • For newbies who might confuse us with being Pollyanna, please take me at my word-we're not. We're simply seeing both sides.

  • If you still haven't caught The Daily Show's take on the state of financial media, this is a MUST SEE. I think it's time they meet the Emmy Award winning Critters!

  • I mean, seriously-at this point, there really is only one thing left to do. Who's with me?


Minyan Mailbag

Todd,

I heard you on Yahoo! Tech Ticker making bets on a big rally going into March. I've been expecting the S&P to drop to 660 all along and expected a big drop going into Q1 earnings.

You have long positions, I have short positions. And I have to say it's a bit frustrating to see so many headlines from Minyanville suggesting that there will be a rally or that the bears have run out of steam.

It's one thing to make a bet, and it's another thing to attempt to manipulate the markets with clout in an attempt to be right and make money.

Your articles may have no influence, but please, let the markets run their course.

Sincerely,
Minyan Ryan

MR,

My friend, please click through the links in this article. Sometimes right, sometimes wrong, always honest.

We (at Minyanville) were very bearish for a long time. If you read, watched or listened to the tech ticker piece in it's entirety, it spoke of a looming binary event. While my gut was higher, the stylistic approach was trailing stops (which made money on that initial pop).

I put it out there, all day, every day and always with the caveat that this is what I'm doing-for better or for worse-and it's not advice (I don't know the risk profile or time horizon of my audience). I've never been accused of attempting to manipulate markets (all I have is my name and word) and please, let's be clear, nobody is bigger than the market, most certainly not me.

Alas, March ain't over yet, my friend. Stay tuned.

Toddo

Answers I Really Wanna Know...

  • Are you operating through the lens of empathy or acrimony?

  • Aren't we supposed to use price to our advantage?

  • Total system meltdown or a kick save?

  • Is the time finally ripe to tell the truth, the whole truth and nothing but the truth?

  • Jeezums, Pfizer (PFE) lost Bar Mitzvah status?

  • Yeah, but is he happy?

  • Would now be a good time to remind Minyans that money you can't afford to lose should be in cash or T-Bills?

  • Has anyone ever seen Jack Bauer eat?

  • Are you remembering to breathe as we find our way through these trying times?

  • With everyone pointing to next Thursday's meeting on mark-to-market, is it possible that the upside trade will be into that event?


Society is a sum of the parts. As such, as we strive to be part of the solution in the 'Ville, I'll humbly ask each Minyan to call someone they care about this weekend "just to say hi." I don't do it nearly enough-time management has never been my strong suit-but it's never too late to start and you never know how far that pebble of kindness will ripple in the proverbial pond.

For all ye Ambassadors in the Minyanville Underground Railroad, we'll be melding next week to assimilate next steps and will send out correspondence in kind. With over 700 like-minded individuals in 50 states and 30 countries banding together to affect positive change-in the two weeks since we've hatched this plan-there is indeed reason for optimism.

As a wise man once said, this too shall pass.

R.P.

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Position in FAS, GE

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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