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Opportunity Lies on the Other Side of the Crisis

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Talking straight about our financial fate.

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My grandfather Ruby taught me that time is the most precious commodity. I would argue that "truth" and "trust" are close behind, now more than ever.

We often opine that credit of a different breed -- that of credibility -- is the issue at hand for markets at large. Faith in the system, belief in our leaders and our views of each other are paramount, not only for the fate of financial assets but with regard to how history will reflect on our current course.

I've made no bones about my sense that we're in The Eye of the Storm, a relative calm between the first phase of the financial crisis and the cumulative comeuppance that'll flush -- and perhaps reset -- the system. That's not a pleasant thought but it must be respected as we access the forward probability spectrum.

Remember, Minyanville warned of the first front while the skies were blue and the screens were green.

We foresaw a "prolonged period of socioeconomic malaise entirely more depressing than a recession" when that notion sounded just plain silly.

We posited that the financials were technically insolvent as they tickled all-time highs and Wall Street was still considered a status symbol.

None of those opinions were particularly popular. I remember the incredulous looks, the mocking emails, and yes, even the self-doubt as none of our concerns seemed to matter. It was of no personal or professional benefit to stay true to that view; we simply believed the cumulative dynamic would come home to roost.

The same can be said for our current course. While I can't speak to the timing or depth of the next wave -- a free-market process of price discovery is a novel notion these days -- the eventual comeuppance is perhaps my most lucid thought, similar to when I mused years ago that "we should buy energy and metals, short tech and financials, and open a taco stand in Costa Rica."

There is, however, massively profound upside in what I foresee to be an inevitable evolution. After that looming shoe finally falls and the system is allowed to reset, those still standing will have opportunities of a generation -- maybe many generations -- to plant powerful seeds in the fertile soil of future growth. In terms of timing and subject to change, I would say the first half of this decade will be about preservation and perseverance and the back half will be ripe with reward.

As a trader and a small business owner, my mission in the rain is to navigate not only the financial market process but the attendant social mood shift which, as discussed, may take many forms. What's more and as strange as this may sound, I want to enjoy the journey, look through the anger, appreciate the little things, and not have any regrets in terms of how, and with whom, I spend my time.

I'm not making the money I used to when I ran a big fund, nor do I have the toys. My validation takes a different form these days and it's not measured by the bottom of my bank account. We started Minyanville to effect positive change through financial understanding and while it's a labor of love, it's a labor indeed. No, it's not easy -- it's a tough world out there -- but there is passion and purpose in my every day, and that counts for a lot.

Take me at my word, I look forward to being the most bullish person in the room although that will surely be subject to scorn, much like it was in early last year. I will remind ye faithful that the popular opinion is rarely the profitable one, and that extends across various time horizons.

So take this with a grain of salt, a dose of humility and the understanding that I may be way off base. If we're at the foothills of a monstrous bovine mountain -- the beginning of a massive secular bull market -- I don't want to be held to task for causing folks to miss a move any more than I want credit for the decisions that you, yourself, must make.

That's not what we do here. That's not how we roll. We simply take it as it comes, tell it like it is and hope value is derived from the residual grist between the variant views. That's sometimes right and sometimes wrong, but it will always be honest and perhaps, quite hopefully, we might even include a few smiles along the way.

As always, I hope this finds you well.

R.P.
Position in S&P
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