WASHINGTON, December 11, 2012 – Yawn. This is one of these days when the Maven wonders why he even tries to write a daily column. We’ve used metaphors like Bill Murray’s “Groundhog Day” film, Samuel Beckett’s absurdist play Waiting for Godot, wash-rinse-repeat, etc., etc., (or ect., ect., as my students in freshman comp back in the day would spell it) to describe the grinding, repetitive patterns of the market. Gosh, we’ve even gotten to the point where you can’t get many Google hits anymore when you put “fiscal cliff” into the headline. It’s all just totally so, like, same old, same old. Totally. Our little feline friend above couldn’t agree more.
Anyhow, as of just before noon today, guess what? The market is up quite a lot. Which probably means that it will go down this afternoon. (Or not.) Apple (AAPL) is finally up today, which probably means it will go down this afternoon or tomorrow. Oil is down a little, gold is up a little, which makes sense since the dollar is down a little—though it hasn’t made much difference this week. Oh, and BTW, the dollar is down because of the fiscal cliff which everyone is bored with so that makes the Euro stronger even though Italy was pronounced politically DOA yesterday. Makes a whole lotta sense, right?
Meanwhile, every market move is suspect because stocks are so incredibly thinly traded, at least according to historical numbers. That’s because the average investor has figured out how to stuff most of his or her money into various low-yielding mattress equivalents because the average investor figures (correctly) that our current HFT- and algo-dominated markets are unsafe, completely compromised, and totally rigged in favor of the ½%.
What a world, what a world, as the Wicked Witch of the West once lamented. At any rate, let’s enjoy today’s seeming rally for what it’s worth. A bigger news day awaits tomorrow. If Uncle Ben hints at dispensing a more open-ended QE3 (since the Fed has apparently bought every existing bond out there already) or if the market thinks he will (which is probably what it’s doing today), then we could get another nice rally. If things are perceived as more negative, and/or if somebody says something negative about the success or failure of fiscal cliff “negotiations” (aka, meaningless political posturing), the market at any time could experience its own cliff, as in “decline.”
Since the computers only trade headlines and not investment quality, the way the headlines are trending is the way the market will go. And gaming the nonsense in Washington these days gives you probably worse odds than playing the slots out in Vegas.
Keep that cash dry and ready. But don’t be too eager to commit it just yet, even on a day like today may be shaping up to be.
BTW, we may take down some shares of tonight’s Solar City IPO which may or may not be available to us. This is yet another solar outfit, but this one’s a little different: unlike disasters like Solyndra, these people don’t make what they sell. They either sell solar panels to corporate and retail customers along with installation; or, better yet, they lease them out on long-term contracts. Ergo, it’s really sort of a bank with a platoon of electricians in the wings.
We actually like the idea of solar, hate the way this Administration squanders tax dollars on it, but are willing to take brief rides on successive IPOs like battery maker A123. That company is now bankrupt and defunct—with its assets possibly to be sold to a (surprise) Chinese entity. But your tax dollars bought the President’s party plenty of votes in and around its Michigan plant’s locale in elections previous to this one and enabled its IPO a few years back.
The Maven cynically jumped on board A123’s IPO which, predictably, amidst early Obama euphoria, popped quite nicely, after which we sold for a nice profit knowing what was likely to happen to the bag holders. Which it did.
Cynicism—always useful on Wall Street—is really the way to go in this market. And our excellent adventure in a bad company like A123 was an excellent case in point.
So we’ll try Solar City tonight if it prices where we think it should. Although if the deal gets hot, the Maven, like many other retail investors, won’t be able to get any. You know who will.
Disclaimer: The author of this column maintains several active trading and investment portfolios and owns residential and investment real estate.
Any positions mentioned above describe this author’s own investment decisions and should not be construed as either buy or sell recommendations. The current market is highly treacherous and all investors travel at their own risk, so caution should be exercised at all times.
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Read more of Terry’s news and reviews at Curtain Up! in the Entertain Us neighborhood of the Washington Times Communities. For Terry’s investing and political insights, visit his Communities columns, The Prudent Man and Morning Market Maven, in Business.
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