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Blinded By the Light

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In a true bear market, nobody makes money--not the bulls, not the bears--and there are few, if any, places to hide.

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Like a moth to a flame burned by the fire
My love is blind, can't you see my desire?

(Janet Jackson)

A moth to a flame? I'm like a moth in a lightbulb factory today! While there is a lot going on, I wanted to quickly chime in as I digest the mess that surrounds us.

Yes, it's getting negative out there. TV pundits, some of which were saying "buy" this morning, are now saying "Don't touch a thing!" Heck, even Minyans, who I consider to be the best collection of human capital on the Street, seem somewhat....scared, for lack of a better word.

I've been (humbly) offering that something is amiss. That, with everyone from Canada to Japan to the ECB pumping money into the system and assuring us that we're "fine," there was an underlying reason that we weren't seeing (particularly with the mainstay averages higher for the year). It still feels that way but we must understand that gaming invisible catalysts is often a lesson in frustration.

What to do? For me, while I've been trading from the short-side (and sharing every imaginable thought I've got with ye faithful), I'm keeping a lot of cash. And I'm making sure that cash is sitting in a plain Jane vanilla (read: boring) money market fund, not one that tries to eek out another percentage point by cutting corners.

I'm not smart enough to know what's out there and I'm not brave enough to guess. What I am is disciplined, which will serve as my beacon in the night as we edge through this fright. That means something unique to each of us (we all have different time horizons and risk profiles) but take it to heart. There are no "gimmes" in this world and there are no do-overs in this tape.

In a true bear market, nobody makes money--not the bulls, not the bears--and there are few, if any, places to hide. Indeed, a snapshot of today's tape finds the crimson tide far and wide. From Goldman (GS) (-4%) to Wal-Mart (WMT) (-5%) to Yahoo (YHOO) (-3.5%) to Boeing (BA) (--2.5%) to Valero (VLO) (-3.5%), stocks across the spectrum of sectors (biotech being the lone stand-out) are feeling the credit pinch today.

Be smart, make your own decisions and allow for an ample margin of error. The time to practice our lessons learned is right here and right now.

R.P.

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.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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