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Todd Harrison: A market of stocks -- not a stock market



An earnings avalanche hit Wall Street this week as corporate America stepped onstage to share its fare. Some random thoughts on the news flow, in no particular order:

Morgan Stanley reported a smaller-than-expected loss on better-than-expected equity trading revenue (always the most volatile component in the earnings mix). Insofar as Morgan was the only firm of the five major banks to trade profitably in 2011 - and helped, perhaps more importantly, by the perception that an imminent European implosion has abated - the stock reacted favorably.

Bank of America notched a quarterly profit, although it achieved its results through a different route: The company sold assets and cut expenses. Still, given the widespread panic that has surrounded BofA - including concerns over mortgage exposure and the near-death experience at the $5 level (which would have prohibited some funds from holding the name) - the news was embraced by investors.

Research in Motion, a stock that I own, exhibited impressive price action after Samsung denied chatter that it was interested in acquiring the BlackBerry maker. While the perception remains that other suitors exist, I sold most of my exposure on Tuesday, after a 40% rally off the December low, as "fast money" piled into the name. I will look to add back exposure as a function of time and price, but I won't chase it.

Finally, while the market has room to the upside, we would be wise to remember that the smartest guys on Wall Street screamed "Get out of stocks!" in December, and that now - following a 10% rally - only 29.8% of market participants, as polled by Investors Intelligence, are bearish.

I suppose you can't blame them, for 2012 is off to the best start since - wait for it - 1987, when the stock market crashed in October.

As always, the destination we arrive at will pale in comparison to the path we take to get there.

Todd Harrison is the author of "The Other Side of Wall Street" and the founder and CEO of Minyanville, an Emmy Award-winning financial media platform. Read him daily at

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