New Barron’s Column: Streetwise

It looks like the new smaller Barron’s (it matches the new, smaller WSJ) has introduced a new, smaller column. Senior Editor Mike Santoli — the author of The Trader column, and an all around good guy — is now penning Streetwise: Similar to The Trader column — it seems to take a broader view of (ahem) the big picture, but is less day-to-day driven than the Trader is.

Here’s an excerpt from the maiden offering:

"People of many years’ seasoning can curse youth or chase it, or both. A woman in the film When Harry Met Sally… describes a male friend’s new, younger girlfriend this way: "Pretty. Thin. Big [breasts]. Your basic nightmare."

The bears’ plaint of 2006 was similar, assailing what most find appealing: The indexes’ near-vertical run higher, its immunity to adverse economic news, a refusal to pull back to furnish better buy points, the broad involvement by most stocks and the full participation of the largest blue-chip stocks. And, yes, many chased it higher.

Most things that drive stocks — liquidity, corporate earnings, interest rates, inflation — don’t suddenly shift with the change of year. Still, age matters. Eventually the sweet crispness of a bullish theme softens to an overripe condition. But how best to measure age, in days or in the distance traveled?

Ned Davis Research reports that this is easily the longest-duration bull market without at least a 9.6% retreat. The next longest was the one from late 1990 to early 1994. The S&P 500 dropped 8% last spring, the slimmest high-to-low pullback of any four-year market cycle since 1934.

Yet over that prolonged stretch, the magnitude of the market’s appreciation has been unspectacular by historic standards. Up about 66%, the Dow has gained less than it did in the next five longest bull markets.

So, as 2007 gets under way, we have a market that’s been unusually placid, in part because of copious liquidity, and that very cash-aided steadiness emboldens greater risk taking across asset classes. Corporate bond investors are more accommodating than a five-star concierge; emerging-market stocks are the world’s darlings."

Macro perspectives, data from renowned quants/technicians, sentiment perspective, a balanced but skeptical viewpoint, leavened with a dollop of pop culture?

You had me at "hello."


Pacing the Invisible Line
Michael Santoli
Barron’s January 8, 2007

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What's been said:

Discussions found on the web:
  1. lurker commented on Jan 6

    another example of non inflation:
    Barron’s now costs $4!
    So I gave it up to maintain my coffee budget.
    Heresy: Santoli is better than Abelson IMHO.

  2. lurker commented on Jan 6

    As for emerging markets, check out FXI!!!!

    Can you say parabolic OVER!????

  3. OldVet commented on Jan 6

    lurker, got a theory on why FXI was chosen for a hit at this time? Increase in banking reserve requirements in China? Slowdown in carrytrade investments using borrowed Yen? Or is this just program trading of all EM stocks in a basket or some sort of “sector rotation” strategy in play?

  4. wunsacon commented on Jan 6

    Newspapers are getting like candy bars: alternating decreases in size and increases in price??

  5. lurker commented on Jan 6

    Old vet–I am afraid my theories have no value, as any fundamental news I get hold of is old and worthless. That’s why I try to look at charts and see what price and volume have to say. At least that “news” is current or relatively fresh. Perhaps this is only profit taking, but when things run up like that, the other side can be steep as well.
    Best to you.

  6. OldVet commented on Jan 6

    lurker, thanks, understood. Thailand and Brazil suffered similar hits, and Russia was volatile as well. Reminds me of May 2006, when I ignored signals of volatility and lost a bucket of profits previously earned no stops.

  7. dryfly commented on Jan 6

    “People of many years’ seasoning can curse youth or chase it, or both. A woman in the film When Harry Met Sally… describes a male friend’s new, younger girlfriend this way: “Pretty. Thin. Big [breasts]. Your basic nightmare.”

    You will know for sure that the MSM has gone to hell if they start faking orgasms in public and call it ‘news’.

  8. Craig commented on Jan 6

    Think back……to 1999…..

    Remember the liquidity arguement then?
    The market had no bottom because it was supposedly driven by liquidity.

    I can still remember a cartoon from 99 featuring a runaway train heading for a broken bridge over a cliff representing the market, driven by “retirement funds”, and an ambulance trying to overtake and stop the train representing the Fed.

    As I recall the fed ambulance didn’t stop the train…..remember?

    This story will end much the same way if we don’t get off the train at the next station.

    This “liquidity” story always ends the same way. When you lose half your portfolio the liquidity problem is solved fairly quickly.

  9. ac-clone commented on Jan 6

    This whole commodities thing seems to be getting a bit out of hand…

    That unusual scent in the air could be genuine fear.

    Anybody up for some cliff diving?

  10. Lauriston commented on Jan 6

    As I note on my blog, “it ain’t over ’till it’s over!”. The doom and gloom sayers have been around since 2003, and I hope they have experienced huge losses from shorting the markets, a massive sin. Why don’t we wait until at least one week or so where panic enters the financial markets or housing, so we know the end has started? Watch out, the bulls may not be done yet!

  11. Barry Ritholtz commented on Jan 6

    You never short? What did you do from 2000 to March 2003? Or in other bear markets?

    # 9 In The Zen of Trading was “Learn to Short/Hedge Stocks”

    The market is cyclical; count on a bear market every four years or so. Unless you plan on sitting out for 18 to 24 months once or twice each decade — as much as four years out of 10 — you better learn to either short stocks or hedge long positions.

  12. Craig commented on Jan 6

    Oh yeah, I remember the bulls in 1999 too.
    They said the same thing…..look at the Nas, look at tech… can’t go down, look at all this liquidity! Whoa! get a load of that cliff!

    I’m not saying short the market…yet, but how much loss can happen in a week?
    Remember DOW theory? First 5 days down = a down year. So far so bad.
    You don’t have a week. The sell-off started just before Xmas and continued this week.
    This is 2006 in reverse. Instead of betting on stopping rate increases the game has shifted to betting on rate cuts.

    Good luck with that strategy. I’m not entrusting my portfolio to bets on Ben.

  13. Craig commented on Jan 6

    Well I’ve been selling into any stength and raising cash. Now well over 50% cash and the rest in strong dividend payers and defensive stocks.

    Interesting to “hear” everyone talk of tech, yet the NAS bounced off resistance and didn’t break out this week. Still putzing around at 43 and change.

    Not exactly a sign of overwhelming strength.

  14. Lauriston commented on Jan 6


    Not sure if your question “You never short?” was directed at me. If so, then let me say I do short very much, like last week when I shorted the Dow Jones (DIA puts) among others (IWM, XLE, QQQQ etc.) Some were profitable, others not (RIMM was stopped out thankfully). I swing trade, so timeframe is very relevant. Since July the long positions worked better than shorts and I actually abandoned shorting until December. What i was implying in my post is that calling it over for the markets right now MAY be premature as this could be just another pullback as we’ve had since July 2006, and many times since 2003. I think we need real pandemonium, mayhem panic like 10% down on markets or 3% down in one day to cause good damage and wake the bulls up from their/our complacency. See my shorting at

  15. BDG123 commented on Jan 6

    I watch China more than I watch the U.S. in many regards. I think China’s equity surge is speculative liquidity expecting a revaluation of the yuan plowing into stocks coupled with China’s inability to gain a handle on the economy. ie, Money supply growth that makes anything seen in western cultures in the last 80 years appear like a day at the park. It’s a long and complicated topic and I am speculating but I’m quite confident China’s policy planners are in a teenie tiny little box.

  16. MarkM commented on Jan 7

    We are right at the point where previous declines on the run from July have halted and reversed according to models I follow. Action like that at the end of November could take us a little bit lower but then I would really start to wonder. So I am guessing by Wednesday we will know the character of this market and certainly by Friday.

  17. lurker commented on Jan 7

    I agree completely that china is the potential trigger to watch this year. Ben is not the guy with the power, the Chinese are. And if and when things go sour it will hit all the markets. IMHO only of course.

  18. VennData commented on Jan 8

    Count me as a Michael Santoli fan. I think his style from the Trader column will be better suited to the macro-focus of the new StreetWise column.

    He’s exchanged a few emails with me over the years and he always goes the extra mile (i.e. the block trading missive he penned this week.)

    … however, Alan Abelson is a national treasure.

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