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Blinded By the Light


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


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.


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