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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