Sometimes you have to ask yourself, "what if?" Sometimes you have to challenge your assumptions and call into question all the conventional orthodoxy out there and it seems like today is one of those days where this putative idol-smashing struck.
I've got five what-ifs that changed the equation today and made people come to their senses as to the fact that perhaps the trends, which can be your friends, have perhaps become too friendly.
First what-if: what if the dollar has indeed stopped going up, or at least isn't going to go as high as the cognoscenti thinks it is?
If you wind the tape back to a week ago before the Fed meeting, we presumed that the dollar was going, in a straight line, to where it would trade one-for-one with the euro. It did get close to it, but when the Fed said last week that rates weren't about to go up, the euro got much stronger. A central tenet of all the big-hedge-fund think out there is that the stronger dollar can wreck the finances of whole countries and cause tremendous pain for all our internationals. Hardly a day goes by without reading about how the big multinationals headquartered here are going to be crushed by a strong dollar. But what if it's not true? What if it turns out that it's not the case? Many of the industrials, the drugs and the techs would be way too cheap, if that's the case.
Consider that IBM (IBM), maybe the most visible of the multinational techs, has gone up 10-straight points without the company saying or doing anything. That's because the dollar's gotten weaker. I was shocked last week that Coca-Cola (KO), after a major hatchet job by the Wall Street Journal, didn't get hit. Why? Simple. Even as it is hedged against the euro, it isn't against a lot of the other currencies that did better against the dollar. You think Johnson & Johnson (JNJ) went to $103 from $98 on nothing? That's the weak dollar talking again. It would be monumental if the dollar stopped going higher and it would catch tons of people by surprise and a majority of the hedge funds would be on the wrong side of the trade.
Second what-if: what if Europe really were getting better? We are starting to see some real growth in retail sales on the continent. We are also seeing Germany become this monster locomotive that could indeed pull every country forward. Plus, the weaker price of energy, for this continent that's pretty devoid of it, seems to be trickling down, too. Of course we have a major German-Greek showdown coming again when Greece runs out of money sometime in April. But let's rewind the tape here, too, back to 2011 when Greece was most seriously in trouble. The logic then was if you gave Greece a break you would have to give Portugal, Italy, Ireland and Spain a break.
Now we look at Europe and we are seeing everything look better in these other countries and they are having no problems financing their debt. There is simply no reason for them to come to Germany hat in hand if Greece is given a special deal and there is no reason they should care if Greece is kicked out. The whole downside of Greece is a total straw man. What if Greece is kicked out? What if Greece is given a decade to get its act together? Either works just fine.
Third what-if: what if oil has bottomed? I know that oil is a little stronger today because of the weak dollar. But take the dollar out of the equation. The simple fact is that the two savviest oil people I know -- the ones with the clearest heads, Rich Kinder from Kinder Morgan (KMI) and Michael Mears from Magellan Midstream Partners (MMP), two companies with gigantic pipeline systems that can peer into the pipe and see the real market -- and both say there is genuine demand for product at the $43 level.
When oil first hit $43 at the end of January, Kinder came on "Mad Money" and said that oil didn't belong in the low $40s because real buyers, not financial buyers, want to lock in those levels. When oil hit it a second time, last week, Mears said the same thing. While many people think that Kinder is talking his book, why did he never sell a share of his company during this period and buy 100,000 shares in the open market a week ago. If you think Mears is talking his book, all I can say is he doesn't have one.
I know it is in vogue to say that we are out of storage space in this country, but here is something worth pondering: if we are out of storage space then theoretically we have no need for imports at all. Well then why the heck are we importing 7 million barrels a day? Believe me, there is real demand and I think we see the level it comes in.
Fourth what-if: what if the Apple (AAPL) watch, which comes out real soon, is the real deal. What if we decide that it isn't a watch at all but a health device that also tells you the time? What if we decide that on one arm we need the traditional watch and on the other arm we need our health maintenance light? I know I am not getting rid of my current watch, but I have every intention of getting the Apple watch because I want all my vitals monitored.
I also was in a real jam recently. I was talking to a college president who is a totally terrific guy and my phone started going off in my pocket. I felt the buzz. I was expecting a really important call that would have determined whether I was going into the dog house or not at home for the foreseeable future. If it was THE call it was worth jeopardizing the conversation. But if wasn't THE call then I would look like an idiot. I needed something that showed who it was that would have been a lot less obvious than pulling out my phone. I risked it. I was wrong. I was in the bow-wow chateau for a week. I thought this was one-off until 10 days ago when I was at a congratulatory party for 10 years of mad money and I was giving a speech and my phone went off. Having just gotten out of the chateau, I figured I better take it. So, in front of everyone, I took the darned phone out of my pocket. WRONG! It was nobody I needed to talk to. A quick glance at my iWatch would have spared me embarrassment and derision in two cases. I think we should stop calling it the watch. I think we should call it the Alarm: it goes off when your health, mental or physical, is threatened.
Fifth and final what-if: what if social media is finally taking much more than its share of ad dollars from just a couple of quarters ago because of mobile adoption. What if the Internet of things has made it so we connect everything through our Facebook (FB) page or Twitter (TWTR) feed or through Google (GOOGL)? Have you seen these stocks? They are all breaking out. I think it's real. This rally has been ignored. Now I think it is being ignored at your own peril.
So, ponder what if the dollar's done going higher, oil's down going lower, Europe's done getting weaker, the iAlarm takes off and social media has now surpassed all media save a handful of television stations with handful of programming? That's what we are seeing right now right here. And it is certainly something to behold.