Get Smart! about the EU Crisis

Good morning and welcome back to the hospital, where the ambulances rush around with their sirens at full blast whether there’s an emergency or not. Think about it.  Talk about the little boy who cried crisis.

Let’s take a look at some of the headlines from the last couple weeks:

• Dow Sheds 200 Points Amid EU Plan Concerns
• Stocks Post Solid Gains as European Debt Fears Ease
• Dow Drops 199 as Germany Rejects New Rescue Plan
• Stocks Finish Mixed on IMF Bailout Rumor
• Stocks Finish Mixed With Europe Holding Sway
• Stocks Stumble as Sarkozy, Merkel Steal Market Mojo

And here are some sample headlines from the last few months:

• Futures Flatten as Investors Eye Europe (September 16, 2011)
• Futures Waver on Eurozone Fears (August 11, 2011)

How about this doozy from a single day’s action:

• Stock Futures Fall on Greek Aid Delay (June 20, 2011 9am)
• Stocks Rise on Greek Debt Reassurances (June 20, 2011 4pm)

Somebody explain to me how any of that is helpful to anybody?  If you’d just ignored all that noise and bought the best tech stocks like Apple, Google and Sandisk when they get crushed by those headlines and the broad selling that ensues, then you’ve had a helluva a great year.  And if you’d just ignored all that noise and stayed short the TBTF banks like Goldman, Wells Fargo and Bank of America or other companies that depend upon government largesse to make their business models work (for example, the LPS and A123 Systems shorts that I’ve harped on for more than a year now), then it didn’t matter whether the futures were up or down because of Greek debt bailout idea rumors in late June.

And that remains the playbook — buy the companies driving technological revolutions on weakness and short the worst welfare-dependent companies you can find on strength.  And I’ll continue to constantly find more names to do both. In the meantime, don’t underestimate the upside potential in the aforementioned tech names and the downside risk in the aforementioned financials.

Get Smart: A Man Called Smart (Ambulance Scene)