Random Thoughts: The Durability of the Consumer Non-Durables Trade
Is it getting too crowded in here?
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 World, Hold On? and Gold Smelting Lower.
Answers I Really Wanna Know... - 12:29 pm
- Are too many people hiding in the consumer non-durables such as Johnson & Johnson (JNJ), Campbell Soup (CPB) and General Mills (GIS)?
- Has the "easy trade" passed in that complex?
- Am I sniffing glue to even ponder a silver and black playoff spot in an extremely week AFC West? (Yes.)
- Are you getting bullish higher and bearish lower?
- If so, will you please remember that setting stops removes emotion?
- Will you have dry powder to put to work by the time The Great Expression ends?
- Does discipline dictate a smallish risk profile in front of Thursday as I'll be away from my screens? (Yes.)
- Is there anything wrong with a little Petty on our time?
- Are you watching S&P 960 as per Pep and Coops DeVille?
- When in doubt, why not wait it out?
Uncanny! - 1:16 pm
No, not this--although there sure are alotta cans out there today! I'm talking about Turnaround Tuesday, the nonsensical notion that the second session of the week is a counter-trend bender.
Yesterday in the 'Ville (and on the tube) I offered that I was making sales (and buying SPY puts) as Turnaround Tuesday loomed and sure 'nuff, it hit home. Don't get me wrong--I'm not coining it--I have a hedged book and my P&L, while green, has a marginal hue (always honest).
So, what am I doing now? Glad you asked...
Getting smaller, for one, as I've pared my long side plays and reduced my S&P exposure in kind. That's due in equal parts to my disdain for edgeless risk and the fact that I'll be away from the fray on Thursday.
Looking at my laundry list. While the Yen is getting away (FXY 95 was my desired energy point), there are babies being tossed out with the bathwater. I continue to view crude as an attractive counter-trend play (demand destruction notwithstanding) and gold is starting to shimmer as it smelts toward a low $7-handle.
And yes, I'm treating everything subjectively as I understand that the Phantom of Deflation knows no friends on an absolute price basis. We spoke about this in 2006 and while we're always early in the 'Ville, the basic premise holds true.
Maintaining perspective. I continue to hear war stories from around the world as social mood shifts and the age of austerity manifests. This is occurring in societal and geopolitical circles alike and tensions are mounting in kind. No, it's not easy and yes, it's tough out there but we have one choice and that's to stick together as we find our way. Be grateful for what you have rather than lament about what you don't. Tomorrow, as they say, is promised to nobody.
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 firstname.lastname@example.org.
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