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Todd Harrison: Thoughts on Janet Yellen's Congressional Testimony


How can social media valuations be considered "high" when the sector is new?

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I'm listening to Federal Reserve Chairwoman Janet Yellen with the rest of the world -- OK, the rest of the world who has a motivated interest to do so -- and I have a few thoughts.

First, of course, she's going to play the data-dependent card. I mean, why wouldn't she? She learned her lesson in her first speech with regards to suggesting the timing of policy, and this approach -- while old and, dare I say, extremely tired -- provides maximum flexibility, which is necessary when trying to dig out of a hole that is bigger than the Earth itself.

Next, the comment about small-cap biotech and social media valuations being a bit high relative to historical norms is curious. Just what, exactly, are the "historical norms" for a brand-spanking-new social media sector? And, in lieu of small-cap biotech, shouldn't she have just said that speculation in cannabis stocks is ahead of itself? While I own a lone speculation play in the group, I don't disagree with her assessment, per recent comments.

Are false dawns (a false start for an economic trend) the other side of green shoots (the start of an economic recovery)?

Market breadth is 3:1 negative, and the banks have moderated, although JPMorgan (NYSE:JPM) continues to hold the lion's share of its post-earnings gains. Goldman Sachs (NYSE:GS), not so much, although it's still up a buck. I wonder when the insider window is going to open for the smartest guys in the room? I would think sooner rather than later.


Twitter: @todd_harrison

No positions in stocks mentioned.

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

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