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Mike Tyson and the Market

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Investors have taken a beating.

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There comes a time when we know the jig is up, and while it penetrates our subconscious, we still need psychical proof before we acknowledge the fact.

For example, at some point during the last Super Bowl I'm sure the New England Patriots knew the New York Giants weren't going away and might even win but it wasn't until there was a couple of minutes left in the game that the feeling materialized and just sort of hit them right between the eyes.

I'm sure a couple of rounds before he was knocked out by Buster Douglas on that fateful night in Tokyo Mike Tyson knew it wasn't his night. He threw his best punches but they, along with his fearsome reputation, didn't seem to matter.

To a large extent I felt the same way yesterday. The best company in the financial space and electronic retailing space posted amazing earnings results, a proverbial one-two punch, and were summarily knocked out!

If significantly better than expected results from Goldman Sachs (GS) and Best Buy (BBY) couldn't get the market into gear, then what can? That has to be the question on the minds of investors this morning. "Gosh, what the heck is it going to take?" was the question on the minds of investors with mutual funds and no exposure to energy, shipping, agriculture or solar stocks.

The simple answer is it's going to take time. The time is different than, say, that of an inmate in a prison that marks the days to release with notches on the bedpost. This kind of time is more like that of someone stranded on a desert island. Each day must seem like a week or even a month and also like penance for a wrong or series of wrongs committed in their lifetime.

If the time lingers too long then perhaps this is an adjustment in the universe based on the wrongs of past ancestors. Without a doubt it feels like punishment.

So, investors had a two-fisted attack that fizzled yesterday and the torture that only characters like Robinson Crusoe and Tom Hanks' castaway could understand resumes.

When will there be an opportunity for rescue? Sure, there are more earnings reports and the Federal Reserve meets soon, but yesterday was that golden moment, that one chance to rebound based on merit, that one chance to get off the island of despair.

Investors didn't panic yesterday: They slumped in disappointment and realization. Investors are looking across out at the market with the same gaze that Mike Tyson peered through as he sat on his stool at the beginning of the tenth round. Hope has been knocked out and the timeless purgatory continues to haunt investors. Sure, there are individual opportunities but what will it take to breakthrough the malaise? That's the question that hung over the listless market like an anvil yesterday.



Is there another Bear Stearns out there?
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No positions in stocks mentioned.
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