Randoms: Have the Fireworks Only Just Begun?
All eyes turn to Washington.
Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community. See also How Many Are Hiding in Gold and A Slice of Humble Pie and Is Ben Bernanke a Contrary Indicator?
In all due respect, Madame President, Ask Around! - 11:55 am
- What if Ethan isn't evil---maybe it's just that he played the crooked warden at Shawshank--what if... President Taylor's daughter is the wicked one?
- The trick to trading is that when you trip--and it happens to the best of us--we mustn't fall. That's what I meant earlier when I offered that that I view each day as an independent P&L.
- What's working today? GLD puts. What's not? Target (TGT) calls. While I peeled off some of the former in here (-$25), I tried to take a loss in the latter when it approached the flat line (but didn't get lifted).
- My point--and yes, there is one--is that selling winners and riding sinners isn't a viable strategy. We need a bit of both to navigate this market.
- While I continue to operate with a bullish bias (for a trade), my risk profile passes the Minyanville Stress Test (am I "ok" up or down 5%). Either way, I don't look at yesterday as a massive mistake, I view it as a valuable lesson that I'll carry forward as we continue to find our way.
- I would "like" to see a trade below S&P 741 to satisfy Pep's aforementioned set-up but, as I watch JP Morgan (JPM) flip the downside switch and General Electric (GE) trade like a ring finger, I can't help but wonder if I should be careful for what I wish.
- Tuesday's are fun days at Carvel, with meetings galore and my syndicated column due on the close. This week's missive, "The Reverse Industrial Revolution," will explore the necessary lenses to properly position ourselves during this perfect storm.
What, exactly, is the Minyanville Underground Railroad? We're creating a global grid of human capital with people who believe our name and word still mean something and there is a better way to do business. If you wanna be a Minyan Ambassador--the "station" in your region--lemme know and we'll get it done.
Marsha Marsha Marsha! - 1:10 pm
Coop's last post coupled with a Minyan request for some Jerry, prompted this vibe. I hear ya Fat Man, we're all Waiting for a Miracle these days.
Yesterday, while on the panel at The Money Show, the topic of General Electric (GE) came up. Before realizing my turrets kicked in, I said "We flagged this at Minyans in the Mountains in 2005 as a financial in drag. I wouldn't touch this with a ten foot pole."
That doesn't mean it can't rally, of course but if I can be frank (Hi, I'm Frank!), this situation scares the sprinkles out of me.
The friction between opinions is where true education lies. In that vein, we offered the bull case for the banks this morning (which has been very well received) and Minyan Peter is in the process of shaping--no, provoking--some thoughts on that topic. I'll tell ya, and I mean this with great sincerity, the human capital in our hood is humbling.
I'm a MUR-Man! With everything currently on my plate, you would think that starting the Minyanville Underground Railroad is the last thing we should do. I would offer that, given the world we live in, it's one of the more important things we must do--connect people who are very good at what they do but better at who they are. Choo Choo.
I like capers but they're so damn salty.
Ah yes, the tape--I continue to "trade around' my bullish bias (buying dips to sell blips) as we edge our way through Turnaround Tuesday (which I think closes higher, for what it's worth).
My intention, so you know and either way, is to pare some risk (winners and sinners) so I have a manageable overnight risk profile. After all, it's only been two days and this Minyan needs some sleep!
As always, I hope this finds you swell. Pork chops and apple sauce. Swell.
Look at those S-Cars-Go! - 1:56 pm
Japan wants to create a plunge protection team? Why don't we just export ours and kill two birds with one stone?
We used to have a saying when I ran the big bucks that once and a while, you've gotta toss a maiden in the volcano to appease the Trading Gods. Into this sharp sprint, I've peeled out of Target (TGT) (near the flat-line) as a function of discipline. And you know what? I hope it trades much higher.
I've traded like a banshee today after yesterday's dough-nation. Once upon I time, I woulda spent the session bumming about what was and what could have been. Now, I look at obstacles as opportunities to learn as I continually attempt to better my process. And yes, after almost 20 years, I'm still learning.
The easy fade (sale) in gold is likely behind us and I continue to trim my puts as a function of price. I'm also gonzo on the SSO, as per my earlier missive of getting back towards basics. I'm still long rental cars--Dryships (DRYS), Yahoo (YHOO), Qualcomm (QCOM), Lowe's (LOW), Intel (INTC), Transocean (RIG), Research in Motion (RIMM), USO--but I wanna use prices to my advantage.
All the while, I can't help but wonder if S&P 800 is too obvious.
I'm a hypocrite! We always say there are no red state or blue state Minyans and that our community isn't bound by religion or borders. Still, every time I get a MUR-quest from Denver--and I'm just being honest here--I cringe at the thought of the dreaded donkeys. I promise to work on this if you promise to be patient. I do, after all, bleed silver and black.
If words were dimes, I'd be a wealthy man. Good luck friends--and remember, this is Turnaround Tuesday.
The 3-G Network? - 3:45 pm
As Snapper and Hoofy race higher into the close, I find myself saying Gee! Well, not so much Gee as G... as in A-I-G (AIG) (-26%), G-E (GE) (still trades funky) and G-M (GM)(deserves as spot in the worry war). All three remain vulnerable and all three pose systemic risk to the system.
Which brings me to my next point.
Should any or all of these firms be in Trouble (note the capital T), I would venture to guess we'll see some relaxation of mark-to-market (or some other seismic shift of the playing field). That chatter is making the rounds and given we've seen this movie before, the boys on the Beltway best not disappoint.
Yesterday at The Money Show, one of my fellow panelists offered it was "idiotic" not to shift this accounting "perspective." I returned serve by saying that the fact our entire financial construct was (is) rooted in vapor and happenstance is idiotic and many banks have been insolvent for some time. Relaxing rules would be akin to giving the drunk another drink with hopes he doesn't sober up. I qualified myself (is that possible?) by saying I DO think we see something but I don't view it as the panacea some are offering it is.
Be that as it may, it would likely produce a helluva jump and that could be what today's trade is trying to get in front of.
NOW, with all that said--man, am I tired--I've managed to recapture yesterday's valuable (costly) lesson and I'm tossing coins in the till. This is some business--all that stress and sweat and mess and, after two days, my P&L is the same as it would have been if I sat on my hands (or a beach for that matter).
While I'm carrying some rentals home (Dryships (DRYS), Yahoo (YHOO), Lowe's (LOW), Intel (INTC), Research in Motion (RIMM), USO), my net exposure is less than half of what it was coming in (and prolly 1/4 of what it was intraday).
Further to that, and while a Snapper to S&P 800 may be the easy trade (with hindsight, of course), I reserve the right to further pare my shares and enter tomorrow with a clean head and greasy glove.
Being bullish and being long are two different things. Being balanced and being strong is a whole other conversation. Either way, I'm keeping an open mind and remembering to stay humble for if you don't the market will do it for you.
Have a mindful night.
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 email@example.com.
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