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Coin-Flip: Cash King for FTN's Dwyer, Greener Pastures for Minyanville's Harrison

Posted Dec 08, 2008 03:28pm EST by Aaron Task in Investing, Commodities, Recession

Editor's Note: At Minyanville.com's "Festivus" holiday event in NYC last week, the main focus was celebrating community, Hoofy & Boo's Emmy, and raising donations for a worthy cause: The Ruby Peck Foundation.

But in a room full of traders, strategists and investors, it's hard not to talk about stocks, too. Tech Ticker was on hand at the event and conducted a series of interviews with various attendees, including some familiar names and names all savvy investors should know. Stay tuned, as we'll be publishing the series over the coming days.

Note: The interviews were conducted Dec. 4 and prior to the Bacchanalian
celebration that ensued later in the evening — or so we heard.

With a brutal year coming to a close on an upswing, a lot of investors are understandably wondering if a true "bottom" was created during the devastation of October and November.

"It's a coin-flip," says Tony Dwyer, equity strategist of FTN Midwest Securities in Cleveland. "Things are bad fundamentally but a some of it is discounted. The question is, 'how much?' Our view is not enough."

Expecting a retest of the Nov. 20 lows, Dwyer is advising his institutional clients to say as "neutral" as possible and with as much cash as their individual prospectus allows. "The credit markets are so dislocated you're guessing if you're calling for an economic low," he says. "I don't want to guess with my money [and] certainly don't want to guess with clients' money."

A (slightly) more upbeat view comes from Todd Harrison, CEO of Minyanville.com and a frequent guest on Tech Ticker. Since declaring his investment portfolio to be 100% in cash this summer, Harrison has slowly been warming up to stocks as a long-term investment.

What's happened in the past year is "like a forest fire — scary [and] dangerous," he says. "But once this process burns through there's going to be a fertile rebirth and greener pastures."

While 2008 heard the "death knell" for the "buy & hold" strategy, Harrison believes there are "great opportunities for a counter-trend trade" in the most beaten down sectors, specifically retail and energy. He also recommends gold as a hedge against potential weakness in the dollar.

But Harrison is no raging bull, offering the following caveats. "We're are going to enter a golden age of globalization led by China and India but not without debt destruction [and] we have to be very careful of isolationism," he says.

28 Comments

Yahoo! Finance User
Yahoo! Finance User - Monday December 08, 2008 03:45PM EST

American society is a sort of flat, flesh-water pond which absorbs silently, without reaction, anything which is thrown into it... -------Henry Adams

- Monday December 08, 2008 03:47PM EST

so what do you do if you still are a buy/hold investor and the value of your portfolio is down 50%??? It sounds like a joke, but many "old school" investors have taken a bath (blood bath). If they lock in their losses, the loss is permanent. If they stay put, they could lose more or try to recuperate some of those losses. Anybody out there with a crystal ball that's not too fractured???

- Monday December 08, 2008 03:52PM EST

I AGREE CASH IS A KING IN THIS TIME.....BUT I AM NOT KEEN ON GOLD........I WILL STICK TO ENERGY LIKE GIANT OIL EXPLORATION COMPANIES ......LIKE EXXON CHEVRON BP AND SHALL....STILL THAT FOUR GIANTS WILL BE THE TRUE SOLID AMONG ROCKS AND WILL REMAIN STABLE NO MATTER WHAT THE MARKET CONDITION..... BUY GRADUALLY BIT BY BIT......

- Monday December 08, 2008 03:57PM EST

Well, you obviously have to prepare for the impending inflation....it may be a few years, but, it will be.

Yahoo! Finance User
Yahoo! Finance User - Monday December 08, 2008 03:57PM EST

WHAT KIND IS YOUR HOLDINGS......IF IT IS BLUE CHIPS ONE OR ANOTHER IT WILL RECOVER.....PATIENT IS THE VIRTUE OF HOLDINGS STOCKS......BUT IF IT IS GROWTH STOCK,SORRY I HAVE DOUBTS......

Yahoo! Finance User
Yahoo! Finance User - Monday December 08, 2008 03:59PM EST

Johnny Ike is the worst tech ticker poster ever. Not only does he portray the image of knowing everything but he can't spell, writes in all caps constantly, can not put a sentence together that makes sense, and yells at everyone who writes bad about him. I am so confused.....

- Monday December 08, 2008 04:00PM EST

I HAVE PROBLEM WITH MY EYES MY EYES SIGHT I NOT GOOD............SORRY....I DO NOT CARE EVEN MY SPELLING IS WRONG...................

Yahoo! Finance User
Yahoo! Finance User - Monday December 08, 2008 04:02PM EST

There will be setbacks and false starts. There are many who won't agree with every decision or policy I make as President. And we know the government can't solve every problem. ....Obama

- Monday December 08, 2008 04:02PM EST

how can you say there isn't deals out there? symbol "NRF" North Star Realty look at the PE ratio and dividends how can people not buy that stock. Others are out there as well. come on people fear is the problem.

- Monday December 08, 2008 04:07PM EST

We "buy-and-holders" who are down 50% should not lock in losses by selling. Instead of "equity exposure" we have to look at potential "capital appreciation exposure" especially when it comnes to "investment grade" corporate bonds through a low cost mutual fund family or an ETF. I have no intention of rebalancing my portfolio at this time to get back to my 80% -85% desired equity exposure. Instead, I'm going to ratchet down my equity exposure to 60%-65% and invest, yes invest, the 20% balance in a corporate bond fund. As far as I'm concerned, I expect to receive traditional positive "stock market-like returns" over the next year or so in a corporate bond fund and then I'll re-assess at that time.

- Monday December 08, 2008 04:08PM EST

Dwyer never saw any of these problems coming and now is embracing them after a 50% plunge in the major indices. I Fade Him. Buy stocks aggressively for Santa Claus rally. Baldy doesn't know diddly.

- Monday December 08, 2008 04:09PM EST

The volatility right now makes covered calls one of the best bets out their. You can buy quality companies, and sell ITM calls 2,3, even 4 levels below the current price and still get a 3% return on your money in a month. There are always opportunities out there. If bought and held stocks are down, sell OTM calls just enought to get 3% back, and slowly try to get back to even. But be cautious with this so as not to miss any big rebounds.

- Monday December 08, 2008 04:18PM EST

To see where the markets are heading think about how trade is being done now which will impact our future within six months.. ... "Daily-rental rates for the largest Capesize category of carrier have plunged from $234,000 just two months ago to $2,320, a fall of a staggering 99%." http://www.time.com/time/business/article/0,8599,1864840,00.html

- Monday December 08, 2008 04:19PM EST

Bla bal bal.... I hate it when they talk talk talk and say nothing. Buy and Hold, sell and buy some more... Multi leniar Dynamic..... more bla bla bal... Get some interesting people on here. WHERE is someone on Housing or Cars factors that are driving our market.

- Monday December 08, 2008 04:22PM EST

Hi boys, how come you don't do a piece on the new bull market that has just started? The S&P 500 is now up 22% from its low, which is a technical bull market. I'll wait for your site to go bullish before I sell. Cheers

- Monday December 08, 2008 04:31PM EST

Funny how everyone loves to come on FBN or CNBC and make their grand predictions. Funny too how they always seem to be around 2-3 quarters from right now. I remember this january when the mortgage criss began to really unfold everyone said we would be heading out of it by 3rd quarter of this year.

Yahoo! Finance User
Yahoo! Finance User - Monday December 08, 2008 04:34PM EST

To "Buy and holders", losses are locked every day when the market closes. If it is a loser, dump it and move on. There is always another opportunity or you can buy it back in the future.

- Monday December 08, 2008 04:39PM EST

didn't Todd red...oops! read what George Washington wus thinking after 8 years in office... Washington had been reelected unanimously in 1792. His decision not to seek a third term established a tradition that is now embedded in the 22d Amendment of the Constitution. In his Farewell Address of Sept. 17, 1796, he drew on the results of his varied experience, offering a guide for both present and future. He urged his compatriots to cherish the Union, support the public credit, be alert to the “insidious wiles of foreign influence,” respect the Constitution and the nation’s laws, abide by the results of elections, and eschew political parties of a sectional cast. Asserting that the United States and Europe had different interests, he declared that it “is our true policy to steer clear of permanent alliances with any portion of the foreign world,” trusting to temporary alliances for emergencies. He also warned against indulging in either habitual favoritism or habitual hostility toward particular nations, lest such attitudes should provoke or involve the country in needless wars.

- Monday December 08, 2008 05:01PM EST

The ship will not come to port until the country is in solid majority. We have been divided for 8 years and it looks as if another 4. We need to find a new direction. Put the map on the table and watch the money flow fear of the unknown is driving the market. Open your mouth B.O. and stick to what comes out.

- Monday December 08, 2008 06:41PM EST

There is nothing directly ahead of us that would signal this is a lasting bull market. With all due respect, all these authors are speculators who generally have short memories where it comes to their wrong guesses. One thing I do know is that if I had lost 50% on this market (and by sheer luck I bailed after a 10% loss) I wouldn't consider putting my remaining money at risk until these dramatic ups and downs come to and end.

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