Randoms: Question Conventional Wisdom!
Don't ask "what," ask "why?"
As I sit here and digest the latest proclamation of economic recovery, I'm reminded of several quotes littered throughout history that, how shall we say, were somewhat premature.
In no particular order:
"Passengers Safely Moved and Steamer Titanic Taken in Tow." - Christian Science Monitor, April 15, 1912
"It could be worse—it could be raining." - Igor, Young Frankenstein
"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States—that is, prosperity." - President Herbert Hoover, May 1, 1930
"Wars over, man. Wormer dropped the big one."- D-Day, Animal House
"Dewey Defeats Truman!" - Chicago Daily Tribune, November 3, 1948
At this juncture...the impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained."- Ben Bernanke, March 28, 2007
“Kerry’s Choice: Dem picks Gephardt as VP candidate.” - NY Post, July 6, 2004
"Don't worry Todd, there's no way they'll overturn that call." Marcus Allen on the Tuck Rule as we sat in my apartment watching the Snow Bowl.
“We will not have any more crashes in our time.” - John Maynard Keynes, 1927
"Come on into the water!" - Chrissie Watkins, Jaws
"Don't worry about my mountain biking skills—I competed internationally in gymnastics!" - My girlfriend, immediately before our recent vacation.
"Major combat operations in Iraq have ended. In the Battle of Iraq, the United States and our allies have prevailed..." - George Bush, May 1st, 2003, to begin his "Mission Accomplished" speech.
“The financial storm has definitely passed.” - Bernard Baruch in a cablegram to Winston Churchill, November 15, 1929.
"Congratulations Todd. You'll never write in this town again." - Thestreet.com Editor-in-Chief Dave Morrow in 2001
“There is nothing in the situation to be disturbed about.” - Secretary of the Treasury Andrew Mellon, February 1930
"From a technical perspective, the recession is very likely over at this point." - Ben Bernanke, the Brookings Institution, September 15, 2009
You get the gist; actions speak louder than words even when words precede actions. I’m not a Debbie Downer by definition, quite the opposite—I’ve learned valuable lessons through the years that taught me that appreciation, gratitude and humility are common threads of consistency and dare I say, happiness.
As Minyans, you’re asked to question “why” rather than accept the “what” and this column is shared with that very intention.
Some Random Thoughts:
- "There's so much money on the sidelines," "There's so much upside" and "those challenging this rally are too pessimistic" are among the comments I heard on television—between the laughter—before I muted the sound. Again, they may be right but if they aren't (again), we'll look back at this (again) with a knowing, nodding keppe.
- I don't mean to be glib and I don't claim to be smart. What I will say with confidence is when the second wave of this crisis arrives—and it will—those same pundits will operate as if you're a fool for being so exposed to the stock market. It's the same rinse and repeat we've seen for years and our goal is to position you ahead of the learning curve.
- My positions aren't the cause of my variant view or the motivation to provoke critical thought. Our mandate is entirely more benevolent; I remember the curious looks and solitude of thought when we first urged Minyans to read the writing on the wall.
- Ditto in February and March when we flipped the switch and were lonely bulls. This isn’t about ego or “great calls,” it’s about making sure ye faithful have the information they need to make balanced and lucid decisions. Sometimes right, sometimes wrong, always honest.
- As long as we're being honest, I'll share that the inability of the bears to dent the NDX during the "presses" lower today is bullish on the margin.
- “If biting sanctions do not persuade the Islamic Republic to demonstrate sincerity in negotiations and give up its enrichment activities, the White House will have to begin serious consideration of the option of a U.S.-led military strike against Iranian nuclear facilities,” said the study from the Bipartisan Policy Center in Washington.
- "Ciao Todd. You may recall reading at the beginning of 2000 about Phillips and Drew's legendary CIO Tony Dye being sacked because he was too conservative. Similarly, "The Knife" has been pushed aside because he, too, managed risk rather than chased reward. It took a month in 2000 to reach the highs. Let's see how long it will take this time." Best of luck, Minyan Gian Marco from Italia.
- I would draw your attention to the laggy banks (which will confirm negative dandruff under BKX 43.25). I understand a broken clock is right twice a day but every day's a new day, that's what I've been told.
- Must Read MV! Minyanville Editor-in-Chief Kevin Depew offers his awesome take on The Myth of the Crisis. And feel free to pass it around as it should be required reading throughout the land.
- As always, I hope this finds you well.
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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