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Monday Morning Quarterback: The Tampa Bay Bucks!


Semantics run rampant in our business but the bottom line is the arbiter of variant views.

Bob Seger once sang that seeing old friends is good for the soul. Following a three-day southbound sojourn, I would have to agree with him.

After a Friday morning business meeting in Tampa, I was blessed to spend the weekend with my close friends Jeff and Cheryl Saut. In addition to being as good as it gets in the investment realm, Jeff has a well-earned reputation as a savvy soothsaying sommelier who is the definition of a true Minyan; someone very good at what he does but better at who he is.

The downtime was well spent. Lazy days lounging on his front porch, singing songs as he strummed his six-string, leisurely boat rides to waterfront feasts and hours upon hours talking about everything and nothing. If you asked me to map the perfect vibe time for a relaxing respite, it would have looked a lot like that.

The beauty of our connection is that in addition to being salt of the earth, Jeff is on the short list of folks whose opinion I hold in the highest regard. John Succo and David Slaine are on it as well, as was Bennet Sedacca. There are others whose views I always want to hear but only a handful of voices I never want to miss.

As seen on Minyanville
, Jeff has been white hot this year. He pushed his chips on the table this spring-in his trading and investment account-and rode the ride as he surfed the tide. And lest you think he's a one trick pony, lemme quickly dispel that dwell. Over the years, Jeff has been two-sided and very much ahead of the curve. Raymond James (RJF) indeed is lucky to have him as their head research honcho.

While chewing through our market views, I asked Jeff whether he agreed with me that we're witnessing a cyclical bull nestled within a secular bear. His response was quick and to the point. "I don't care." While that may seem flippant to those that don't know him, I immediately understood his point. Semantics run rampant in our business but the bottom line is the arbiter of variant views.

As we ate brunch on his porch Sunday, our discussion steered back to the market. "I wouldn't be surprised to see a correction of ten percent or so but according to Dow Theory, we are indeed in bull markets," he offered as a slight breeze masked the Florida heat. "I can write a script where the government sells these toxic assets and makes trillions of dollars. I'm not saying that will happen, but I can certainly write that script."

I reflected on his train of thought-always seeing both sides-before offering a response. "Right back into the hands of a private sector," I thought, "Just like they've done with Fannie Mae (FNM), Freddie Mac (FRE) and a litany of other enterprises over the course of history. The sad part is the magnitude of obligations that will transfer to an unsuspecting generation."

As I paused to soak in his variant view, he spoke softly to nobody in particular, "You betcha."

Random Thoughts:

  • Why do I get a strong sense Minyans will relate to this most excellent missive?

  • Asset allocation works in a bull market. Stock (& spot) picking works in a bear market. Trailing stops, both ways, is a viable strategy but won't protect against overnight risk.

  • The S&P tested the 50-day moving average on Friday and bounced, which is what you would expect on the first probe following a rapid decline in a pronounced uptrend.

  • Why was the market so funky last Thursday? "Gravity" pops to mind but the more likely reason was the tape being propped up into quarter-end.

  • The natural question now becomes whether performance anxiety manifests into year-end or if the government sponsored euphoria will give way to the weight of an unsure world.

  • I covered roughly half of my short-side exposure (late Thursday and Friday) and continue to operate with trailing stops on the leaves. Gonzo, for now, are the S&P puts, but I'm still dabbling in the four-letter freaks and select banks (although that's a quick and dirty rental for reasons previously discussed).

  • If you're actively involved in the markets-or want to better understand the financial process-the best real-time content in the 'Ville can be found on the Buzz or the other excellent subscription products. There are free trials so please take this in the vein of "not sellin', just tellin'."

  • I was asked in an interview if someone can consistently beat the market. I responded "It can be done by some but not by many." It's not everyone's "thing," nor should it be. The trick to the trade-or investment-is proactive preparedness, which is an ongoing journey for us all. The thrill of the 'Ville is that we'll get there together.

  • Beeks! Payroll data on Friday showed a loss of 263,000 jobs versus an estimated loss of 1,750,000 jobs. That brings the cumulative total job losses since October 2007 to a staggering 7,200,000, and that's just what the BLS will fess up to!

  • The household survey-which asks individuals about their status rather than the companies that employed them-the September count was 785,000 (yikes) and U-6 unemployment has edged up to 17%.

  • Minyan Mike Santoli, in his excellent Barron's column, noted that non-financial US company cash holdings as a percentage of tangible assets are at highest level since mid 1950's. There has also been chatter about how John Q. Public is salivating on the sidelines.

  • The "old me" would argue that's massively bullish. The "new me" reminds myself that social mood and risk appetites shape financial markets.

  • That's really the trillion-dollar question, right? If we've shifted into an age of austerity, as I believe we have, thrift-both voluntary and involuntary-will be a generational dynamic. Savings in a bull market is prudent; savings during a bear market is hoarding.

  • $700 bill in corporate debt has been sold so far this year, more than was raised in the entire calendar year of 2008. That wont be an issue this year-in fact, one could argue that bodes incredibly well for the near future- but it plants the seeds for "more of the same" in the years to come.

  • I had the pleasure of sitting with Steve Forbes a few weeks ago for thirty minutes of discussion of Minyanville, the markets and the world at large. For those interested, here's the link the 'View.

  • Friday December 4th will be our annual Festivus to support The Ruby Peck Foundation for Children's Education. As the last three holiday events have been sold out, feel free to lock your spot!

  • With the exception of a few hours here and there, I'll be at my turret throughout this five-session set. Next week, the critter show will be on the road with six cities in five days, including a Minyanville Town Hall Chat on Friday at Syracuse University. If upstate Minyans wanna mingle on the hill, click here for more information. Thanks kindly for understanding as we do our part to build the 'Ville!

  • Good luck Minyans and think positive; profitability begins within!


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