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Random Thoughts: Lower Crude is Equity Negative

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Despite popular opinion, dipping oil prices may not be so great.

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  • Be careful for what you wish! Last night while talking tape on TV, we spoke about the likelihood of lower crude prices. I continued to be the lone voice that viewed that as equity negative through the lens of asset class deflation vs. dollar devaluation.

  • As discussed yesterday, my sense is that the drillers and miners have double jeopardy. Which would, of course, explain why I have such massive short side positions. Sigh.

  • Breadth is working 9:5 (what a way to make a living) but volume is light. It feels as if the bulls are using a lot of energy as they scrape back towards S&P 1405 but we must remember that in a reactive (uncertain) market, the buyers are higher and the sellers live lower.

  • Meanwhile, over in Matador City, the financials have quietly found some sponsorship. Given my hit it to quick it mindset, I've unwound my (marginal) exposure in that complex as a function of risk definition.

  • Good traders know how to make money but great traders know how to take a loss. I'm far from a great trader but I think of that every time I unwind red ink and I find it pretty helpful.

  • In hindsight, I should have added back some Gannett Inc. (GCI) yesterday (as I 'trade around' a core long). I'm not complaining (looking up) as I've learned that bumming when you're green is the quickest way to lose steam. I do, so you know, expect a four-handle (although I'll likely pare on the way there).

  • I've suggested a few tunes for Newbie Staffers Jill and Freddy to sing at the staff meeting. Thus far, Ebony and Ivory, The Weather Girls and The Crying Game but none of them seemed to resonate. In fact, I think I may have scared them!

  • Did you know that Stevie Wonder's birth name was Steveland Hardaway Judkins? I sure didn't but I couldn't shake the thought of him this morning and stumbled across that tidbit.


R.P.

Position in GCI

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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