Random Thoughts: Positioning Into the Weekend
Be careful with the risk you take home.
Editor's Note: The following content was posted in real-time on our premium Buzz & Banter. It is being shared here for the benefit of the Minyanville community.
Gate Sniffage! - 9:57 am
- Minyan Editor Terry Woo is awesome but seriously, I wish he wouldn't blast this music first thing on a Friday!
- We spoke yesterday about my portfolio housekeeping--which included buying some Lehman (LEH) and selling my S&P calls. While we can debate the merits of the latter matter, that discipline has saved me many times over the course of my career. Look forward, not back, as that's where profitability resides.
- I sold half my Lehman on the opening (again, discipline) as there hasn't been any price talk... or a deal, for that matter. Better lucky than smart and I remain quite conscious of the yawning disconnect between credit and equity.
- There were some nice nuggets of wisdom nestled away from last night's Professor gaggle. I'll tell ya, it's humbling to be part of such an awesome community.
- Early morning market breadth is 3:1 positive*. That asterisk is a function of time as market internals as a trading tell don't kick in until the first half hour passes.
- Michael Phelps found himself a gold winning gal. What a shocker!
- I've got meetings and more meetings today (six, at last count) so lemme hop and hustle through the Freaky Friday Fray. Let's hit 'em hard, Minyans, and hit 'em to quit 'em!
Snivlets R' Us! - 10:49 AM
So Big Ben Chimed that commodity and dollar trends are likely to slow inflation. Be careful for what you wish, Big Dog--the difference between "disinflation" and "deflation" is a matter of semantics and degree.
Color me gonzo in Lehman (LEH) into this 15% overnight pop. Not chest bumping, mind you, just communicating as we spoke about buying it on yesterday's late day Buzz.
I mean, seriously, if I told you that Bear Stearns was gonna be taken over a month before it happened and you bought the stock...
I'll be the first to support child labor laws and denounce the exploitation of children but taking this kid's gold medal is unfair to the kid. Or, at least that's how I see it.
I've made some sales in Merrill (MER) as well, as -- honestly -- I'm not diggin' how it's trading. While I've been actively trading around the (small) position--buying dips and selling blips--my net/net performance in the position is negligible.
Not every trade is gonna be a winner. In fact, I'm reminded of the adage "Good traders know how to make money but great traders know how to take a loss." I'm far from great but that doesn't mean we should ever stop trying.
I guess crude $120 is resistance after all. Sigh...
Lemme hop and hobble Minyans--hope you're having a great Friday!
Jump, Test, Run, Rest? - 11:34 am
I'm officially "outie" of my upside financial exposure and took a small S&P October put position.
- Breadth is still snazzy, mind you, but we've now got "the reality of Fannie (FNM) and Freddie (FRE)" versus the "speculation of a Lehman (LEH) takeout."
- And then there's the matter of the massive credit bottleneck awaiting us in September.
- I'm still long some Yahoo (YHOO) but that's April paper and I'm trading around a thesis, not a catalyst.
- The fact that so many people view "something entirely more depressing than a recession" as an impossibility is the very reason it's more probable than most people believe it to be.
- I'm also aware that nobody will really care "who" called for the prolonged period of socioeconomic malaise. It just seems silly that the media continues to ask the same folks who didn't see it coming for their view on when it will finally end.
- World, hold on...
- I continue to look at Research in Motion (RIMM) as a potential short candidate. If it can't rally with the tape, what's it gonna do if and when the broader bid softens?
- The tape has to rally because oil is down, right?
- Wrong... there is no historical evidence of such a correlation. In fact, we need only look to yesterday to see the holes in that bag, baby.
- If societal acrimony is as frictionous as it is now, can you imagine what it's gonna be like in October and November before the election? I don't often hope I whiff on my ten themes but this is one I wouldn't mind missing.
- Yes, I'm looking out towards the "outside in" recovery (globalization) with the notable caveat that it's likely 4-5 years away. Take me at my word, by the time the recovery arrives, Minyanville will be branded Pollyanna the same way it was branded Cassandra in 2004 and 2005.
- The financial news you need to know before you know you need it.
- Gotta hop as The Truman Show awaits. As always, I hope this finds you well.
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