Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Randoms: Bull Market or Just Plain Bull?


To buy or not to buy, that is the question.


Holy cow, I feel like I just gave birth this morning. What started as "just any other column" morphed into a complete catharsis. This writing thing began almost ten years ago as a favor to my former partner-and I'm grateful to him for that-and I took to it as it helped crystallize my thoughts.

Sometimes right, sometimes wrong, always honest, right? Some Random Thoughts as we find our way:

  • Did you really think that Hoofy and Boo weren't gonna weigh in on the health-care debate?

  • I saw Mr. Practical last night and his "best thought" was that a powerful rally is approaching in the US dollar (I believe he said there was a 97% bearish consensus, which would be an anomaly). As Minyans, you should know the potential implications for asset classes as a whole should that come to pass.

  • When an accounting standards board can single-handedly determine the fate of the entire global economy, we have to ask ourselves how strong that global economy really is?

  • In terms of "denial, migration and panic," this feels like the blow-off rally phase. If that's the "easy" assertion; the difficult one is the question of magnitude.

  • I've had a fascination with semi-colons of late. Do you thing that's some sorta allergy or something?

  • Yes, I continue to operate from the short side. I'm "sized" right but it doesn't change the fact that I've been spitting into the wind. We don't sweep our mistakes under the rug in the 'Ville, we learn from them, and that's a lifelong process.

  • NDX 1700 remains an important level--drawn with a crayon--on a weekly basis.

  • Do yourself a favor and don't listen to this song; it'll stick like oatmeal to your ribs.

  • I can't help but wonder if a real break--rather than tending to one--would have rebooted my mojo. It's a moot point and all that matters now is a speedy recovery, which is well underway (many thanks to all ye faithful who sent white light).

  • Expiration tends to exacerbate volatility in the days prior to the actual put and call funerals. Keep that filed away in the back of your crowded keppe.

  • Best in Breed this morning? Citigroup (C) (nice eyes Kru-Cat!) and Bank America (BAC).

  • Flies in the try? The homies-which warrants a mention given the technical juncture.

  • We pride ourselves on seeing both sides of every trade. Through that lens, here's an optimistic take on total debt to GDP, which is pushing 400% (vs. 250% in the 20's and 150% as a long-term average).

  • I respect the vibe-remember, credit markets act great-and agree with him in one regard. I have a very hard time conceiving that we, the people, are under-indebted.

  • For what it's worth and so it's said, I felt different when I awoke this morning, sorta like the weight to the world has been lifted from my shoulders. Not sure what that means-yet-but I thought I would share.

  • I'm slammed like Adrian Adonis on the wrong end of Bob Backlund's aggression. I'll be back but before I go…

Minyan Mailbag!


Good morning, I appreciate what you do for investors, even if I don't always agree with your perspective. We're roughly the same age (I turn 40 in November), so the biggest 'recessions' I remember are 1990 and 2001. I do have some memories from the 1970s of cheap gas, but much of that is long forgotten.

I've been doing much self-research about recessions, unemployment, housing starts, new home sales, etc. in the past few weeks regarding this "recovery." One of your thesis (and many others) is that this recession will have a weak, jobless recovery. Just looking at stats, I disagree.In terms of GDP declines, 1954, 1958, 1974 and 1982 all are closely correlated with our current GDP decline. Only 1974 had a moderate recovery (~53% in ~9 months, but S&P 500 didn't surpass the Jan, 1973 peak until the early 1980s) due likely to inflation and high-yield treasuries competing for money. 1954, 1958 and 1982 all had quick recoveries (9 months or less) from trough to peak and kept rising.

In terms of unemployment, 1948, 1958 and 1982 closely correlate with our current situation. In all three cases, the S&P 500 rose dramatically in the following months (96%, 60%, 59%).

In terms of housing starts, these are the worst population-based numbers on record by far. In 1982, there were ~350 U.S. people per single unit housing start (~218 per overall start). In 1990, there were 300 per single start (~249 per total start). Markets rose quite nicely once housing starts bottomed and turned. Last year, there were 489 people per single start and 336 people per total starts. Based on the low numbers so far, 2009 is shaping up to be >700 people per single start and >500 people per total start.

I could go on and on. So far, S&P500 is up ~40% since March 1, 2009. While I don't know the near-term ups and downs, I do know that history shows continued short-term (<6 months) significant upside.

Please correct me if I'm wrong. And again, continue to give Minyanville your best efforts.

Minyan Brooks

Minyan Brooks,

I appreciate the reply, as these are all solid thoughts. I suppose the root of the issue is whether historical precedence applies to our current construct. I offer this as a firm believer that anytime someone says, "this time is different," it's a red flag and history has a way of humbling those who believe in new paradigms, bears included.

Last year, when asked if this would be as bad as The Great Depression, I offered, "FDR didn't know what a derivative was nor was more than 60% of Americans invested in the stock market." Through that lens, this crisis, I opined at the time, could be entirely more profound that what was witnessed during The Great Depression.

Now that we've seen a massive rally off the low, the question is begged, "Is the worst behind us?" It may well be in terms of absolute price levels but I would argue we've simply seen the first wave of the crisis and others will follow, manifesting in unforeseen ways (including the potential for a currency shock).

Remember-and this is important-the imbalances are cumulative.

I will also note-much as I did in December 2006-that the disconnect between perception and reality remains marked; while "things" are much better, as measured by the stock market, the majority of Americans, and quite possibly those throughout the world, don't feel as if we're on a fresh path of prosperity.

History teaches us that social mood shapes the markets; the Crash didn't cause the Depression, it was the other way around. With virtually everyone of the view that the worst is behind us and we've side-stepped "something entirely more depressing than a recession," my fear remains that a downside dislocation is more viable than when it was blinking on everyone's radar.

How one factors that into their particular equation is up to them. As you know, I was very bullish in late February and early March, balanced (two-sided) through most of the summer trading range and have operated from the short side (wrongly) since. Be that as it may, for my part, risk-management continues to trump reward chasing as we edge forward through these interesting times.

Thanks for the Minyanship and good luck with your adventure.


< Previous
  • 1
Next >
Position in s&p, ndx

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

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.

Featured Videos