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The Cody Blog: Cody on RM: Speaking the Language of Change

Wednesday, July 26, 2006

Cody on RM: Speaking the Language of Change

Speaking the Language of Change
07/26/2006 12:14 PM EDT


It's been one heck of an economic boom and bull market for the last three-and-a-half years. Despite the endless warnings of pending economic disaster from all the permabulls who became permabears after the tech bubble popped in 2000, the economy -- especially the tech economy -- has been on fire. Consumers, who the permabears mistakenly pointed to as the weak link, were indeed the strongest link. Utilizing all that excess liquidity from the Fed, they kept the economy afloat and catalyzed the boom.

The fact is, things change! I started my own change 10 years ago, riding my meager savings and a one-way ticket to go east of the Mississippi to NYC. It took years of fighting, scrapping and living in slums, but at some point, New York City became more my home than my much smaller hometown. It's quite a change, let me tell ya.

The economy changes, too. It goes through cycles, even if they are muted and accelerated by the digital revolution. At first, this latest downturn in the cycle was subtle, indicated mostly by climbing inventories and an end to the acceleration of end-user demand. The turn can be impossible to time, but at some point, the turn does indeed come, and a good economy turns south.

I was one of the most vocal bulls, shouting out loud about the boom. Talking about the good times to most Wall Streeters, most of the time I felt like Big Bird talking about Snuffleupagus. In early May, I pulled in my horns and went almost entirely to cash (and Softee), and though I want to get excited and bullish again, the fundamental picture remains muddled at best and weak at worst.

Coming from New Mexico, where we say things like "I'm fixin' to ..." as in "I'm fixin' to go down to the orchard to pick some apples," sometimes I feel like I speak a different language than most of the folks here on the Street. The latest case in point has me question whether I am crazy or are many of the guys I call "permabears" (because they've been predicting economic and market doom) continually talking about "rebounds" and "long side schnitzels"? Is that some strange Wall Street dialect that I haven't figured out yet? Perhaps it's just noise? Heck, perhaps my own rantings are just noise.

Meanwhile, the market has continued to, as I call it with my New Mexican twang, "dislocate" to both sides (mostly to the downside) as the market comes to terms with the turn that the economy has already apparently gone through. From the companies themselves:

* UPS, CSX, Rockwell Automation: The real question now becomes how sustainable the downturn is. Will the digital economy mute and accelerate this downturn as it has others during the boom?
* Wal-Mart, Target: Will consumers collapse or just catch their breath before running again?
* Black & Decker, Stanley Works, the homebuilders: Will housing only "cool" or "bust"?
* Broadcom, Corning, the semis: Will inventories balloon and crush these companies under their own weight? Or will sell-through flow and clean out the channels?

Gun to head, I think the economy will indeed turn and get booming again. But I'm not going to risk much capital on that thesis until prices come down even more or the fundamentals begin to pick back up. More to the point, I plan to remain focused on trying to find secular growers, regardless of the outlook for the broader economies and markets. Do you speak my language?

13 Comments:

Anonymous Anonymous said...

my god you're such a friggin putz. Do you think anyone cares about your journey. You're just another in a long line of examples of the giant bubble in finance-related jobs in the last 10 years. For your sake, thank god for bloggin. It allows irrelevant putzes like you to speak to an empty room

7/27/2006 02:03:00 PM  
Blogger Cody Willard said...

Well, given that you came here and read this....I think it's safe to say that you yourself care about my journey! ;) Seriously, these same ol, same ol attacks like this sure do confuse me -- I mean, why do you bother coming to this site, and then taking the time and energy to post this anger? Don't you see that your anger displays how MUCH YOU CARE?

I guess I'll say "thanks for caring, man." And I suppose I must care about you too, since I'm addressing you too. Nice symmetry after all!

7/27/2006 02:18:00 PM  
Anonymous Anonymous said...

hey cody.. you're a dummy. Go ahead and waste more time responding to this. I guess being in cash gives you a lot of free time. Of course if the market goes up again, you'll just say you're in tech and always have been, since its all pretend money and you're blogging from mommy's basement, you dummy.

7/27/2006 02:27:00 PM  
Blogger Cody Willard said...

I mean...okay, man. Good luck to ya'.

7/27/2006 02:40:00 PM  
Anonymous Anonymous said...

if cody took a shit in the woods, would any one smell it? and would his mommy clean it up for him?

7/27/2006 03:39:00 PM  
Blogger Stephen L. McKay said...

Cody,
I have noticed this anon with his immature attacks seems to have taken a turn toward the angry. I'm no mental health professional, but this guy is a weirdo (maybe he lost money with a hedge fund, or he manged one and was not successful, I don't know)His attacks are no longer an annoyance, they are down right creepy to me.
Do yourself and your readership a favor and ban him. This is NYC we live in my friend!
Keep up the good work!

7/27/2006 04:54:00 PM  
Blogger Stephen L. McKay said...

PS There has to be a way to ban this guy, even if he signs in as anonomous. Maybe you have to stop allowing anonomous comments. I would!

7/27/2006 04:59:00 PM  
Blogger Mr. Wells said...

To Anonymous: I can't imagine a fund professional of 15 years (wow, that's so impressive) spending 'valuable' time trying to tear Cody Willard down. Now, I can afford to waste my time after 50 years on Wall Street watching jealous little miscreants like you try to make themselves feel better about their dismal, disappointing lives by ripping at others. I'm betting you got tagged for a double digit loss in June, or your girlfriend found out what your wife has known for years---that you're just a little prick.

7/27/2006 07:15:00 PM  
Anonymous Anonymous said...

mr. wells must be cody's dad. LMFAO!!

7/28/2006 01:05:00 AM  
Anonymous Anonymous said...

I read Cody's blog because he is so damn attractive!

7/28/2006 01:17:00 AM  
Blogger James Altucher said...

Maybe we should organize a "Fight Club" among the people who read and write the comments here (including Cody). Then people can remain anonymous but still get a chance to get out their aggressions. And I agree with anonymous, thank god for blogging. Cody's blog in particular so I can live vicariously through him.

7/28/2006 09:54:00 AM  
Blogger Cody Willard said...

I'd had this one taken down, as I got the email of the post from the road and was sick of dealing with the anger from this dude. But seeing Mr. Wells' pithy remarks -- hell, they speak for themselves. So, here's the comments that Mr. Wells was speaking to. And thanks to all of ya for having my back:

yeah let's ban me since I point out that:

1) Cody is a putz

2) He's vague enough to claim success all the time and ignore his horrendous picks

3) He rails against perma-bears, but he is a perma-bull!

4) He has no qualifications or track record from what I can tell to be managing money, but in this bubble era of 10,000 hedge fund managers - BINGO he's given a stake. What a laughable joke (FYI, I manage a substantial fund myslef -and I am qualified -with a 15 year successfultrack record!)

5) He looks laughable with his pathetic GQesque poses

6) His simplistic rants on Microsoft and tech make him no different than the thousands of other tech jokers that got wiped out 5 years ago and are about to be wiped out again

7) His poses look really really gay - Gee I guess that makes ME gay for pointing that out (LMAO!)

7/28/2006 09:55:00 AM  
Anonymous Anonymous said...

To "anonymous",

Is the world not filled with enough hatred for you? Must you propagate your stupidity in this forum against a person you don't even know? I knew Cody Willard many, many years ago, and I can assure you that he is neither fake, a dummy, or a putz. However, it seems as though you are projecting some serious confidence issues in yourself on Mr. Willard. Why don't you volunteer some time at a shelter, or perhaps donate some blood, hell, if you're young enough, join the military.....Do something productive and positive with yourself, since your your 15 year successful track record obviously brings you very little true happiness. and I'm not anonymous...my name is Luke

7/28/2006 02:15:00 PM  

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