- the importance of discipline; and
- three high fliers.
This Market Mocks Discipline Posted at 2:18 p.m. EDT on Friday, Sept. 13 I found myself stymied this morning on "Squawk on the Street." David Faber, Carl Quintanilla and I were all talking about what's about to happen in Washington -- that we could be looking at another federal government shutdown. Judging by the rhetoric that's precisely what is going to happen. We'll be staring right down the barrel of another federal fiasco fewer than three weeks from now. I then turned to Carl and said that when that occurs we are going down because there's no way this stock market can handle that kind of pressure from Washington. We're going to hear about social security checks not going out and possible U.S. government debt downgrades and these will all weigh on the stock market. So he asked me a logical question: do you just sell now? I thought about it for a second and said, "you know, I have been advising people to so some selling but, candidly, I've been wrong." Then David asked what will I be thinking as we get closer. I told him here's how it works. I will say do some selling right into the event and the market will keep going higher and I will then say, that's it, I can't stand it, just go buy something and that will mark the top. Of course I was being facetious. Sure, the market's stronger than I expected. But it is also frothier than expected and I don't like froth. Take Ulta Salon ( ULTA), which ran up $18 today after it reported a better-than-expected quarter. Now, I know there were people who thought that Ulta might miss. It's a very-highly-valued retailer and it's heavily shorted. But this rally today, these 18 points, weren't only about a short squeeze. There are tons of portfolio managers who simply can't resist owning a retailer that actually had a better-than-expected quarter.