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Random Thoughts: Studying Risk in China

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Will China be able to keep the ball rolling until the Beijing Olympics?

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  • As discussed on the Buzz out of this morning's gate, I flattened my remaining put positions into the initially harsh morning muck. I wasn't huge-it was actually a shadow of my former size-but the mechanics of the swing should be noted nonetheless.

  • Why? S&P 1490, for one, and the sense that the bulls would try to "kitchen sink" the Citigroup (C) news.

  • The Hang Seng was off a finski (5%) after China's Premier said that the government needed to study risks, increase knowledge and prepare regulations to protect the markets (the markets?) in Hong Kong and at home before allowing individual investors to buy shares.

  • 5%?!?! That brings this index all the way back to... October 23 levels.

  • Still, see the long-term parabolic frolic and respect the nature of bubble psychology. It was different in dot.com. It was different in real estate. It was different in a debt bubble. And it's different now. Or not.

  • But will the Chinese balls stay in the air until the Beijing Olympics?

  • On my word, I saw something over the weekend that made me think to myself, "Self, Interactive Corp (IAC) sure seems to be worth more from a "sum of the parts" standpoint. Diller is a sharp cookie... I wonder why he doesn't whack it up?"

  • Vikram Pandit was my boss while I was at Mother Morgan. Smart guy, for what it's worth, and very mild mannered.

  • Green seeds nustled in the muck? Beta---from Baidu.com (BIDU) to Research in Motion (RIMM) to Google (GOOG)--is performing and until this hiding spot gets rocked, we'll likely see more motion than movement.

  • And yes, I thought the Amazon (AMZN) news a few weeks ago was that pebble in the pond too.

  • General Electric (GE) and AIG (AIG) also stand out, if for no other reason than they're tertiary financial plays (financials in drag are next in line on the domino chain).

  • Toss Boots & Coots (WEL) on your radar as well. If the Middle East is heating up, and certainly no pun intended, this little frisker could benefit.

  • Trade. Don't hope. The definition of an investment should never be a trade gone awry.

  • Keep an eye on crude as well--it's gnawing back to the flat line.

  • And deep breaths, Minyans, it's a marathon, not a sprint and we're gonna need some mojo on the back half of this week!

  • As always, I hope this finds you well.


R.P.


Holiday Festivus is here! Come join us and support the Ruby Peck Foundation For Children's Education at an old-fashioned Southern-style hoe-down in the heart of New York City on December 7th. Click the image below to learn more!

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.

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