Maybe I Shoulda Been a Glib Macro Guy

 | Feb 22, 2013 | 7:08 AM EST
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One thing is for certain, if you asked the hedge funds what is the one reason why this market goes higher, they are going to say "the Fed."

And therein lies the real problem of this market. You either hate the Fed and think its bond-buying program is illegitimate and you are therefore betting against stocks all the time. Or you fear that the data will one day be so good that the Fed will stop its program.

Just like from the beginning of the era of the billion-dollar hedge fund, there seems to be no middle ground. There seem to be so few people who say, "You know what? Corporations have a lot of money. Dividend boosts are rife. The merger games are on. The consumer's got a great balance sheet. The economy will be able to sustain itself. The stocks deserve to sell higher."


It's either " the Fed can't do this forever and it is all a big phony and it will never work and we are in a  permanently crippled economy hobbled even further by Washington's strife and a very liberal president," or, "the Fed can't do this forever and it will stop well before it says it will and we will all be left sitting on the Titanic."

As a stock picker I feel endless pain from this one. How many times have I been faked out by this Fed/bad nonsense? How many times can you sell Heinz (HNZ) because of it, or NYSE Euronext (NYX) or Berry Petroleum (BRY) or Dell (DELL) or Google (GOOG) or Union Pacific (UP). The list goes on.

How many times can you hide in cash because of it?

I was furious yesterday every time the glib notion of "sell everything" was spoken. That's not a glib thing to say on air, believe me, because people actually do it.

The whole totally Fed-centric thing steams me. 

Sometimes I wish I could change my stripes and be a big macro thinker, sit back and castigate the Fed and say "the market's a big joke."

'Cause I have to tell you, if I were to do that I would be taken a heck of a lot more seriously than if I were up 16%, as Actions Alerts PLUS was last year.

That's right. Sometimes I feel that we are now in a world where it is better to be wrong and not making money than it is to be right and making money.

It's times like these when I truly do have contempt for the job. How much more fun would it be to, for example, decide I didn't have to read the Toll Brothers (TOL) conference call because I knew it was all phony because it's propped up by the Fed? How heavenly would it be to be able to ignore the Berry Pete deal or the Copano deal because they are only figments of Ben's imagination and there will be no more deals once people realize what a farce it all is or the economy gets stronger or he's fired or leaves or whatever.

The fed fraud/phony stuff makes a total mockery of what I do with my worklife, or at least the way I have done it. Yeah, it is that bad.

I don't know any other way to put it. As long as the vast majority of strategists, trigger pullers and behemoth funds subscribe to this uber-Fed-as-all-that-matters theory, my whole attempt to explain why PepsiCo (PEP) is better than Coca-Cola (KO) or that the New York Times (NYT) should be bought or that we could be near the bottom in Millennial Media (MM) or Magnum Hunter (MHR) is a total fool's errand.

Tell me I am wrong

Tell me.

I'd love to know, because I think the homework still matters and the over-Fed reliance for all decisions is a crutch, not a sign of wisdom.

A crutch that one day will disappear and we will realize that the individual homework on individual stocks is, indeed, the way to go.

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