Santa Claus Rally

Latest thinking says we could get a little Santa Claus rally here. Trying to call the trend of the overall market though is a mug's game, and nowhere is this more evident than in this blog where I have already been humbled in recent days/weeks! Unfortunately the need to make the right call on the broader markets is self-evident even if one only plays individual stocks, as we are constantly reminded that total return comprises alpha AND beta components.

Back to Santa. 2009 has been infinitely better than '08 and most money managers are still so shell shocked they chose to do nothing rather than risk blowing the gains already in the book. Seasonally we are entering the time of year when large unexplained price swings are common. At least this year we don't have to contend with huge tax loss selling as most accounts are sitting on gains for year. We bounced off the 50d average in Toronto, which is a good sign (for the longs). A major IPO in the junior resource space was canceled recently, which is indicative of selective risk appetite out there.

I will close today with this quote (and I paraphrase):
"Never has so much data been so poorly analyzed by so many people" - Norman Fosback (from the book, Stock Market Logic)

Enjoy the weekend!

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