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Random Thoughts: More Swings than a Hedonism Vacation

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How do you rationalize the irrational?

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Editor's Note: The following was posted in real time on our premium Buzz & Banter. It's being shared here for the benefit of the Minyanville community. See also Squeeze or Wheeze? and Weighing the Fray on Turnaround Tuesday.


Holy Guacamole! - 2:14 pm

So how's your Tuesday shaping up?

On top of finishing a comprehensive column for tomorrow (that began last night at 7 pm and lasted until justnow), I've been juggling an important lunch meld, fielding phone calls, working with lawyers (all good), building the 'Ville and trying to make sense of a market with non-nonsensical structural backbone.

I'll tell ya, Jeff Saut once told me that the mind is incapable of thinking about two things at the same time. The savvy soothsayer may be onto something there.

Given my A.D.D. moth in a light bulb factory status, I'm gonna take the gloves off and scribe the first vibes that pop into the fire hazard formerly known as my crowded keppe:

  • Hey wait a minute--if Hank and Ben are both on television, who's gonna push the button?

  • Market breadth, if "tells" still matter, finds three red for each ahead on the big board.

  • Green beans in the red sea? Microsoft (MSFT), Oracle (ORCL), Yahoo (YHOO), eBay (EBAY)... in other words, N's over S's, at least for today.

  • I'll tell ya, the first person that invents a turret with a urinal will have themselves a loyal customer.

  • One thing became perfectly clear during these testimonies. Policy makers have NO CLUE about the magnitude of this crisis, the dangers of derivatives or the potential consequences that could manifest. They don't seem to "get" that even with massive intervention, it might be too late to stop the contagion.

  • And they seemingly have no understanding about the risks associated with the adoption of this bailout, the unintended consequences that are already in motion, the fragility of social mood and the dependence on credit in a finance-based economy.

  • And I'm leaving the construct of capitalism and the basis of our free market society out of this conversation for the time being.

  • With all that said, I will again caution that there is significant two-sided risk as a function of the structural impediments. I continue to field calls from folks that can't borrow ETF's. One only has to look to last Thursday and Friday to see what happens when too many people try to get off the same exit.

  • I just had an exchange with the smartest credit guy I know who tells me that the credit market is "imploding" and the preferred market "not functioning."

  • Trying to see the other side (as always), I asked him if that could be considered bullish. "I've been schooled to believe that "bid wanted" situations for stocks were signs of a capitulatory bottom, if only for a trade." He told me that it's different for debt and said he would follow up as soon as he had a moment to breath.

  • Meanwhile--whoa Nellie--JP Morgan (JPM), Morgan Stanley (MS)and American Express (AXP) just violently flipped the upside switch... is it real, or is it contra-hour?

  • Aw what the heck, bathroom breaks are over-rated. Oy.


Blood, Sweat and Fears - 2:35 pm

If Mercury Retrograde hasn't arrived, it's most certainly close. On top of yesterday's brown out (as I was about to go on live TV) and several "glitches" with our Internet service last night, my chair just became entangled with my microphone and, as i tried to fix it (I'm Jewish--I should know better), I pricked my finger and blood spurted everywhere.

Man, talk about a war--this is literally a bloody battle!

The point of this post? Oh yeah...

I tried my hand on the long side with a coupla select financials when I spotted the tide turning. Nothing crazy--I'm trading smaller as a function of the volatility--but I'm there (in the common, not options) with a $1-trailing stop on 'em both and a "win, lose or draw" mentality into the close.

I'm not drawing a line in the sand. I'm just trading with defined risk, keeping one eye on contra-hour and trying to make some hay while the sun shines.

Sometimes right, sometimes wrong, always honest.


Oy Vey is Meir! - 3:36 pm

  • Mercury Retrograde has been fast tracked. It's official. It's here... and it's fabulous (not so much).

  • Why the wild swings in commodity land? Simple. The marketplace is trying to come to terms with the new world order.

  • On one side, there is socialization of markets, nationalization by governments and potential hyperinflation.

  • On the other, there is asset class deflation, risk aversion and the unwinding of the debt bubble.

  • OK, maybe it's not so simple--but it is what it is and we'll do what we must.

  • My two trading longs today? JP Morgan (JPM) and Wachovia (WB). Why dem? Pure eyes as they were trading dry and they were my piggies in the poke.

  • Will I take 'em home? Nope--discipline is a two-sided sword and both have $1-trailing stops and/or 'gone by the close'.

  • Stick and move. Hit it and quit it. IN-N-OUT Trader. Call it what you want but call me disciplined. The mechanics of the swing always outweigh the result of the at-bat.

  • I'm gonna flip and focus on the close, my friends. Before I scoot, lemme offer three housekeeping items.

    • If you haven't locked your spot for the December 4th Festivus--it's for the kids!--let's do it. The mere idea of our community bellying up to the bar and cutting some rug is mighty tasty right about now.

    • If you've got Mini-Minyans in your midst, introduce them to Minyanland, which teaches earning, spending, saving and giving to children. It's never too early to start (nor is it too late!).

    • Finally, sport some Minyan gear and wear it proud. We just got in a new slew of critter shwag and, while I don't often do this, I wanna put it on ye radar.

  • Fare ye well into the bell and have a mindful night!


R.P.

Positions in WB, JPM

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.

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