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Random Thoughts: Standing In The Eye of the Storm


It's hard to spot a hurricane when you're standing in the eye of the storm.

  • Our plan to entirely phase ourselves out of society is almost complete!

  • It's hard to spot a hurricane when you're standing in the eye of the storm.

  • The discipline of being a contrarian is to not assume a view simply because it's contrarian.

  • I continue to hear horror stories from the sell side. These are my people and many are close friends-not to mention that we're all about positive mojo the 'Ville-but we sorta saw this one coming.

  • Several college Minyans have asked me how to begin their career on Wall Street. I offered several nuggets of interpretation in no particular order:

    • While it's tough-and will likely get tougher-there will always be a seat for smart, aggressive, honest people. Tenacity, resolve and determination are massively important for if you don't want it, someone will come along to take it.

    • Get your foot in the door and do whatever it takes to add value. For me, that meant making salad until I figured out how to trade.

    • Take a good, hard look at the buy-side. While many hedge funds will require experience, it's my belief that we'll soon see funds buying brokerage functionality. Skating to where the puck will be, rather than where it is, could save you five years on your career.

  • Clockwork Crimson! There are certain things you can rely on. The sun rising each morning, the Raiders missing the playoffs and the markets getting nutty when I'm out of pocket. Indeed, the "Toddo away indicator" is alive and well!

  • Levels of Lore remain: S&P 1408, DJIA 12,800, NDX 1980-1985, TRAN 4350 and BKX 80, if and when.

  • Past support is future resistance so, along those lines, toss Citigroup $30 as price point worth watching, if and when.

  • I'll again say that, while crude $100 (and above) is a drag on the consumer, a precipitous decline in oil would be more problematic through an "asset class deflation vs. dollar devaluation" lens.

  • My new year's resolutions? Be good to others and better to myself. That, and I quit smoking (which I'm ashamed to admit I was doing in the first place but picked up as a function of countless hours of writing).

  • "Who's this Login guy and why is he on my computer every morning?"

  • Hmm, consumer non-durables and pharma. Makes sense in a slowing economy. The question, I suppose, is whether the gains will in fact be relative or absolute.

  • The beta bunch, from Google (GOOG) to Research in Motion (RIMM) to Apple (AAPL) to Baidu (BIDU), continued to unwind their year-end hide-and-go-seek gains this morning but have since turned. Keep an eye on them as a sentiment proxy this week.

  • The dollar remains an important valve with which to view the dew, particularly as it pertains to the energy and metal arenas (both of which are sectors that I cooled at the end of last year).

  • I believe the Fed has to cut although I'm not in the panacea camp. In other words, just as we saw in 2001, we could very well see "scissor traps" (folks perceive this as a solution rather than a reactive rationalization). When the Fed first snipped, we implored Minyans to ask "why" rather than "what." This continues to be the case.

  • Gerbilfur?

  • We'll continue to see a transfer of wealth as foreigners pick away at paper assets and real estate, although I foresee this as more of a buffer rather than a savior.

  • Note the VXO, despite the Art Carnage last week, remains near the midpoint of its recent range. I believe this has to do with the liquidity infusion (liquidity is the opposite of volatility) but wanted to note it nonetheless for purposes of perspective.

  • The following Buzz Bits appeared at 11:10 AM…

    • Over in Tellsville, breadth is surprisingly flattish as Citigroup (C) and JP Morgan (JPM) flip the upside switch. I'm unsure if we need to wait for Bonnie tomorrow but an upside try certainly wouldn't surprise me. Watch our aforementioned levels (past support, current resistance) if and when it arrives.
    • Am I trading it? Not yet--I'm in watch mode as I find my bearings and edge back into reality. I've still got images of Lahaina Town and Baldwin Beach flickering in my crowded keppe--not to mention the makings of a killer jet lag--so I'm doing a bit less as I ready for a massive 2008.

  • As always, I hope this finds you well.

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