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Random Thoughts: Fed Slices, Dices By Half Point


The first move after the FOMC is usually the false move.


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 Seduction, Corruption and Redemption and Dollar in Decline.

Red Bull! - 12:11 pm

  • For what it's worth and so it's said, I have great respect for Jim Rogers and always wanna hear his take. This particular interview was one of his best.

  • Finding balance in this day and age is a full time job.

  • The specter of geopolitical unrest is one of the reasons for my upside rentals are gold and crude plays. I'm trading around them with an eye towards selling rips after buying dips. Stick and move, baby, stick and move.

  • If the dollar continues lower, however, they could have fresh legs so keep that in the back of your crowded keppe.

  • Things I've Learned.

  • Trick of the Trade: If you have an error, get it off your sheets immediately. Trying to "trade around" a mistake typically leads to more mistakes.

  • As a follow up to previously mentioned vibes, I'm trailing my stops on DryShips (DRYS) (+15%), the GLD (+2.5%) and sold 10% of my position in DXO (+26%). And yes, I was stopped out of my small SPY try yesterday for a loss (lest newbie Minyans think there was a chest thump in there--we don't roll that way in the 'Ville).

  • Gotta hop--I'll be back. As always, I hope this finds you well.

Buffalo Soldiers in the Heart of America - 1:17 pm

  • With the S&P 100 handles above the 2008 intraday low (don't blink!), it's worth noting that the "Fund vs. Fund" dynamic we spoke of on October 15th remains in play. The only thing worse than losing money as a mutual fund manager is under-performance.

  • While a lower dollar is no guarantor of higher asset class prices, continued lethargy in the greenback is supportive of them. At least until foreign holders of dollar-denominated assets balk and walk.

  • Keep an eye on Grandma Goldman (GS) and Mother Morgan (MS), both of whom have suddenly found a bid.

  • One of the first things I learned over the course of my career is that you'll never make as much as you want and always lose more than you should. Smooth the edges and understand that the mechanics of the swing trump the results of the at-bat.

  • The Festivus ferver is beginning to build. If you haven't locked your spot for the critter trot, you may miss a sensational soiree with the very best human capital around.

  • Yeah Mon, there's nothing wrong with a little Marley on our time. This is, after all, the journey and we gotta enjoy the steps as we take them for by the time we get to where we wanna go, the trip will have ended.

  • As always, I hope this finds you well.

Parliament? Big Ben! Parliament? Big Ben! - 2:40 pm

A few random thoughts as I digest the Fed and ready to roll out east to our MV off-site meeting:

  • The Fed said inflation will moderate in the coming quarters? Noice--just when we thought their credibility couldn't possibly suffer anymore than it has!

  • The first move after the FOMC is traditionally the false move.

  • Mass snaps to my buddy Pete Scialla on his promotion to partner at Goldman Sachs. Not only for what he's done, but for how he's done it with integrity, humility and humanity. It couldn't have happened to a nicer guy.

  • The key tell post FOMC? The dollar, Yo. The longer it remains a redhead, the better the odds that Hoofy will keep some sizzle in his step.

  • Keep in mind that following yesterday's Hot Popper, an semblance of stability will be viewed as a constructive step.

  • So you know, my trailing stop was triggered in Dryships (DRYS) and, following the FOMC decision, I nibbled anew at lower levels. Just trading and staying forthright in our communication.

  • As I'm outie tomorrow, I'm gonna stay relatively light and tight. I will, however, keep some crude exposure (DXO) and I'll likely bid back for some of that gold I sold higher this morning. All small, mind you, but that's where my head is.

  • Please note that the IFN (India), EEM (emerging markets) and FXI (China) have traded sloppy today. Maybe digestion... or it may be indigestion. Time will tell but I'll again offer that with a longer-term lens, I think these are vehicles of value.

  • Lemme jump so I can post this while it (hopefully) has some value. Be well, Minyans, and be the ball.


Did you know the doors to Festivus 2008 are officially open? Have you yet locked your spot for the critter trot as last year's soiree sold out? (This is our annual event to commingle our professors, partners and Minyans while chowing down and listening to live music. The very best part? It's for the kids in the good name of my grandfather.)

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Positions in gold, crude proxies, DRYS, GLD, DXO
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