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Tuning Out the Lehman Noise

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It doesn't make sense to buy this rumor.

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Hello from the NASDAQ, where I'm getting ready to don the war paint and try to say something nice about the market at 3:30 pm on CNBC. Actually, the most interesting thing I can think of doing is a cross-mojination allowing me to slap Toddo's Fox News mug from pillar to post for shorting my Wal-Mart (WMT).

Since they won't let me do that on TV I'll do it here: I understand the negative consumer bet; if I didn't I wouldn't have used Rodeo Bull Cinching as my theme for the entire Retail Round-Up this morning. I understand shorting strength. I see the $60-ish resistance on WMT and have spoken of it often. What I don't get is shorting a best of breed in a world where retailers like Target (TGT) have gone up 20% in the last month and continue to miss estimates by a mile.

Shorting Wal-Mart here is akin to walking onto a playground and picking a fight with the gym teacher instead of all the little kids. Once you've decided to engage in the unseemly business of fighting or shorting, you might as well pick on the weakest targets (so to speak).

In news and metaphors that almost have to seem cheery by comparison to the above:

  • Insanely great insight from Mr. Practical this morning regarding Wells Fargo (WFC) hiking a dividend and raising money at a cost of 9.75% within weeks. Whoever he is, someone should get Mr. Practical a Luchador Mask and put him on financial television.

  • Anytime you find yourself wanting to buy Lehman (LEH) on the basis of rumors of a foreign purchaser, ask yourself two questions: 1) Do you really think the gub'ment would let a foreign bank take Lehman in an election year? 2) If you were the foreign buyer in question, and you couldn't walk into Lehman HQ without the stench of fear battering your head like the kick of a mighty Luchador, why would you pay a premium?

  • While we're talking about trades I remain involved with despite actually agreeing with the other side (a la staying long WMT); the wildly imperfect but good enough US Dollar proxy ETF UUP is having a nice day. "Our financial crisis is better than theirs" is pretty much the entire fundamental bullish thesis for the dollar.

  • No, I didn't pull the trigger on the Potash (POT) trade I was pondering yesterday, both here and on the Tee Vee. Two reasons, first Potash and all the Ags suddenly have a nasty habit of gapping lower (making "stops" somewhat pointless and rather dangerous). Second, if I'm not able to sit and monitor a trade of such a high risk level for the entire trading day I just don't want to do it. Getting off a train to find myself down 15% on a counter-trend trade is the kind of thing that could really ruin a guy's day.

  • Speaking of Toddo, Mr. Kickboxer's instructor would, I'm sure, tell you the same thing my boxing coaches once did: Don't engage with your opponent if you're confused. Today at least feels like the start of a panic but it doesn't quite feel like a "Babys and the Bathwater" moment. Doing nothing, ideally with your left hand high and your right fist very near your jaw, is a perfectly viable option. The goal is calm and practical, not "Macho."

  • Which arcs us back to our Mr. Practical / Luchador idea: I wonder if I could bait Mr. P onto Fast Money by donning my own mask and claiming to be the real Mr. Practical, spouting reckless nonsense and dragging his good alias through the mud until he's forced to come on my air to defend himself. He's tough but Times Square is My House from 5 to 6 pm. If the producers had enough imagination to let me run with the idea I'd be off to look for a good mask and backstory ("I wear the mask for the faceless souls who died shorting the Internet bubble."). As is, I'm off for the 3:30 pm hit. Make the best of a tough day, Minyans, and don't get cocky, regardless of how your P&L is holding up. Bear markets humble us all, in time.


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