"Street Critique"-Todd Harrison, Founder and CEO of Minyanville
Wednesday, September 23, 2009PAUL KANGAS: Tonight's "Street Critique" guest says it's been a great rally, but eventually that proverbial shoe is going to drop. He's Todd Harrison, founder and CEO of minyanville. And Todd, welcome back to NBR.
TODD HARRISON, FOUNDER & CEO, MINYANVILLE.COM: Great to be back, Paul.
KANGAS: What did you make of the Fed statement today? It looks like policy makers are seeing signs of recovery. Are you positive?
HARRISON: I think we've seen this move before with them. I think the take away is they're going to be accommodative as long as possible and they are trying to squeeze the public back into risky assets. And they've done that in large part. But the proverbial saying on Wall Street is the first move after a Fed announcement is a false move. We saw a gush up and then took (INAUDIBLE) at the end of the day.
KANGAS: Indeed, stocks are sitting near their highs of the year. As long-time trader, what are you seeing in the market?
HARRISON: What I'm seeing is risk being shuttled back and forth between the public and private sector. You're seeing a lot of secondaries now as companies take advantage of higher stock prices. And much like energy, risk isn't created or destroyed, it simply changes form. And I think that that's largely what we're seeing and I think it warns a bit of caution on the part of investors.
KANGAS: You were bearish on technology and shorting the sector when you joined us early last month. But those stocks have continued to move higher. Do you still see trouble in the tech sector?
HARRISON: I think the technology sector right now is a bang for the buck play for portfolio managers, inter quarter and potentially into year end. But to be clear, that last trade was just that, it was a trade, a defined risk setup. Once that triggered, I was out of the trade and I'm trading from the short side now, but it's very defined risk management over reward chasing.
KANGAS: Cut your losses short and let your profits run, in other words, right?
HARRISON: That's the way to trade them.
KANGAS: OK. You're an experienced trader, that's for sure. Any particular stocks you do like at these levels?
HARRISON: I'm cautious at these levels and I don't want to be a broken record, but I will say the one thing that concerns me is the uniformity and the opinion that we're going to continue higher. For certain, credit markets are pointing in that direction, but from pundits to politicians to hedge fund managers across the board, there's uniformity in the belief that we're going to continue higher and we're seeing an echo bubble. I think that any time everybody is on one side of the boat you got to be careful. I'd just proceed with caution. Risk management over reward chasing and set your time horizon to your risk profile.
KANGAS: So caution is your byword for the moment, correct?
HARRISON: It is, but I respect the up side. I just, opportunities are made up easier than losses.
KANGAS: And you can change from day-to-day. Todd, I want to thank you very much for joining us again.
HARRISON: It's as always, my pleasure, Paul.
KANGAS: My guest, Todd Harrison, founder of minyanville and author of the e-book "Memoirs of a Minyan."
