Wall Street embraces that 'Les Miserables' feeling

It's cold, it's December, and we feel like Jean Valjean. Photo: Unversal/PR image

WASHINGTON, December 14, 2012 – Wearing his reviewing hat tonight, the Maven will be headed off to downtown DC to review the new roving stage production of the hit musical, Les Misérables. Not surprisingly, the brand new, much-buzzed about film version—a star-studded spectacle featuring actors who, in some cases, are not particularly well-known for their singing ability—is also headed for a massive Christmas season opening. That’s Harmonic Broadway and Hollywood Convergence to the max, we’d say.

This cosmic confluence of all les choses misérables would truly seem to be transforming this otherwise Mayan Calendar, End-of-the-World kind of month into…well…an unofficial Les Misérables-style conclusion to 2012, n’est-ce pas? It’s certainly been a miserable year for those few individuals left in the game who, throughout much of this investing year, could rightly claim the moniker of les misérables for their own. Between the rallies, the waterfall declines, and Apple going way up before it went way down, there’s only been room here for the Hal 2000s and the occasional nimble day-trader, Anyone with a rational investment philosophy has been hosed.

Apocryphal tales of buy-and-hold adherents now seem to most shell-shocked investors to be part of an extended, faintly risible urban legend in which even a non-professional could slowly gain wealth via thrift, patience, and faithful adherence to the laws of compound interest and dollar cost averaging. We now live in a world that seems to have been brought to life by the tales of the Brothers Grimm. In the original, non-Disney-fied version.

Right now, the market is looking to have an indecisive, negative Friday with volume low and conviction lower. The action is distinguished by the wholesale selling of generally conservative, stable stocks like utilities, REITs, and MLPs as well as anything else that might either have an oversized dividend or might have given investors a nice capital gain.

Whatever the future holds for these stocks, though, who cares? Dividends and capital gains are out now. The fiscal cliff is in. Confusion and a sense of hopelessness rein supreme. The current sellers are either going to be right about the impending 2013 investing disaster that seems now to be rushing toward an irresistibly bad conclusion. Or they are going to be partly or wholly wrong which could create for those remaining bulls a lucrative January To Remember as the market slingshots to new highs amidst a spectacular buying panic. Each bet at this point, though, is only 50-50 at best.

We are doing our best to hunker down and go for relatively safe yield at this point. We say relatively, because the classic green lights of high, defensible dividends and a lower-than-average price-earnings (PE) ratio don’t make any sense to the machines, and hence don’t make any sense to the averages.

Making even less sense is the fact that Congress and the White House continue to play games while we pay them the big bucks to solve problems. The real problem is, though, that actually solving a few of these problems will likely cause incumbents to lose elections and none of them want to risk that. So they continue to screw around and collect their fat salaries while doing no work whatever for their constituents.

Which is the real problem with today’s markets. No one knows what the tax structure will be anymore. No one knows what socialized medicine will really cost. And no one except Obama and Uncle Warren “Tax the Rich” Buffett is confident that his or her employment situation will remain secure in 2013. So you get the current unpredictable mess.

We’ve been waxing somewhat philosophical in our last few columns as it’s really hard to have any confidence in the predictability of anything. Which is the real reason the market remains screwed up, businesses refuse to hire, and banks refuse to lend except to Warren Buffett. (And George Soros.)

In the meantime, we’ll continue to explore the condition of les misérables and await our personal invitation from John Galt to just drop everything and head for his Gulch.

We do have some investing ideas to tide us over until we get some clarity. For what they’re worth, you can find them in our other column, The Prudent Man, as soon as we get them posted. At which point we’ll add a link here.

Meanwhile, just relax, forget the nonsense, and get your Christmas lights up. It’s all a matter of positive psychology at this point.

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.

Illustrations, charts, commentary, and analysis are only the author’s view of current or historical market activity and don’t constitute a recommendation to buy or sell any security or contract. Views, indications, and analysis aren’t necessarily predictive of any future market or government action. Rather they indicate the author’s opinion as to a range of possibilities that may occur going forward.

References to other reporters, analysts, pundits, or commentators are illustrative only and do not necessarily represent an endorsement of such individuals’ points of view. If specific investment vehicles are mentioned in any article under this column heading, the author will always fully disclose any active or contemplated investments in said vehicles.


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.

Follow Terry on Twitter @terryp17


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Terry Ponick

Now writing on investing, politics, music, movies and theater for the Washington Times Communities, Terry was formerly the longtime music and culture critic for the Washington Times print edition (1994-2009) before moving online with Communities in 2010.  



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