'Buy the cannon, sell the trumpets', they used to say of war's effect on trading - go long at commencement of hostilities, then flat or short when hostilities cease ..... though this was originally commodities trading wisdom, it applies as well to companies likely to benefit directly or indirectly from the situation .... and though this is not a war with an easily identifiable or locatable enemy, nor a prospect of a nice neat peace treaty at its end, its start is certainly a galvanising event that would seem likely to wipe away instantly the market malaise we've experienced for the last year and a half ... much of the air is out of the tech bubble already now, it seems probable imho that any possible downward spike due to this event would have the effect of bringing forward in time the bottom of the trough and then accelerating the new bull run ..... changing what might otherwise have been an U with the width of years to a sharp V.
There were a lot of pros in the WTC, seems like they would have been more short than long in this market ... could be a factor, maybe, if their positions were to be covered now ... in any case, while symbols of business and a fraction of its participants were destroyed yesterday, with respect to the whole body of business, as well as the military, perhaps they have 'awakened a sleeping giant and filled him with a terrible resolve' |
