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9:00 AM EST, Friday, April 17, 2009. The market continues to explode -- as it has from March 9.

There are still many awful things, chiefly unemployment, an insolvent banking system and seriously scary commercial real estate. But sentiment is up. And the banks are now free to fake their financials, making themselves look as good as their (tiny) consciences will allow.

A money manager called Tiger Consumer Partners finished the first quarter up a phenomenal 16%, compared to 11% drop in the S&P500. In their quarterly update of April 9, they wrote,

Three substantive issues impacted our recent results. First, the current investing environment is much more straightforward and logical from a fundamental view point compared to the last several years. What I mean by this is that the economy is weak and is expected to remain that way for the foreseeable future. As such, supply needs to shrink to match a new, lower level of demand. From our perspective this reality is logical and analyzable and stands in stark contrast with the "easy money," "LBO fever" backdrop of recent years when even mediocre companies were being bought out at high valuations on peak profitability. The credit crisis has returned the investing environment to a state of normalcy such that intrinsic value is once again a function of the fundamental rather than the speculative. It is incrementally easier to project earnings and assess the value of those earnings in this more rational environment.

Second, I think we are doing a much better job of managing risk. Specifically, we have developed some proprietary ways to measure the nature of our "bets" on the long and short side of the portfolio and are using them to better manage risk.

Last, our investment team is doing a great job. We are focused, committed, energized and highly incented to perform. We meet every morning and discuss the portfolio.

For many it's a the classic day-traders' market. Play the day's trend and never hold a position -- long or short -- overnight.

This is the VIX. You'll notice it has come way down. That says "the hurricane has turned into a breeze," writes Richard Russell last night.

Yesterday the VIX closed at a new low for the year. It's telling us the big danger is past. Writes Russell, "The markets are calming down, the markets are saying that we're moving back toward "normal." Despite what you hear, the markets are telling us that they don't see a crash ahead. As far out as they can see, the markets don't envision an emergency."

In analyzing stockmarkets, there's a strong presumption that the market will continue to go the way it's been going. It's been down so heavily so many people remain on the sidelines, afraid. But that could change and push up prices even more dramatically. Some savy friends are back in. They are perhaps more intelligent. Notice how the headlines are changing-- becoming positive. The earnings are lousy, but "they top street's estimates." This morning, MarketWatch (owned by the Wall Street Journal) headlined, "Citi, General Electric first quarter results each top street's estimates."

I don't give this piece much credence. But this article from the Financial Times of April 15 has been getting some attention and you should read it.

NYSE chief cautious over March rally
The March stock market rally that fuelled hopes of a broader economic recovery was deceptive because “real money” investors remained on the sidelines, according to the chief executive of NYSE Euronext, the world’s largest stock exchange.

In rare comments about market movements, Duncan Niederauer said in an interview with the Financial Times that the rally was driven by short-term traders trying to take advantage of high volatility and not by large institutional or other long-term investors.

Mr Niederauer suggested the high trading volumes and gains in leading indices did not necessarily reflect any real conviction that the worst of the economic crisis was over.

He said the volumes had been concentrated in a handful of stocks.

In fact, he said volumes had held up well because of what he termed a “traders’ market” in which participants tried to take advantage of greater volatility without needing to take a view on, or believe in, the long-term prospects for recovery.

He said: “The real money investors are still waiting. I think they’re waiting, they’re watching. They want to make sure that what we saw in March is real. And I think once they are convinced you will know it. The market will have a totally different tone to it.”

He added that the rally had also been concentrated on a handful of stocks and that large institutions and long term investors were largely keeping their powder dry.

Mr Niederauer said he sensed that volumes, while relatively healthy, were below the levels which would indicate that investors had regained confidence in the fundamentals of the market. “I think we’re waiting for another rally, in my opinion, in around June and July,” he said.

He said a summer rally would be a six to nine-month leading indicator of economic recovery and that by April 2010 the global economy would look much healthier.

The benchmark S&P 500 index rose by 8.5 per cent in March, its best month since October 2002, leading some bulls to predict that the recovery had arrived.

The big news at business school. Since none of the students can get jobs, they're writing business plans, hoping to start new businesses. This is healthy. Today, I'm playing judge (one of many) at New York University Stern's Annual Business Plan Competition. I have to be there at 8:00 AM. Yuch. The kids are competing for more than $175,000 in seed money and in-kind support. Big money.

I have three plans to review -- computer software to help diabetic patients improve their blood glucose control; individualized education on the go (i.e. mobile devices) and "the most efficient tool on the market for social group interaction on a smartphone" (e.g. iPhone, BlackBerry and Palm).

Google Voice is starting soon. Get on the invitation request list. Don't even think about why. Just do it. Sign up NOW. Go here. For more on Google Voice, go to this article from Forbes.

Don't open email attachments. As if you need this warning again. Attachments bring viruses. Here's the way to remember it:

April showers bring May flowers.

What do May flowers bring?

Pilgrims.

What do attachments bring?

Viruses.

OK. Not very good. But it's early and the NYU judging starts at 8:00 AM.

This one is for Dan Good and his loveable new dog.



On a road triip
An elderly couple stops at a roadside restaurant for lunch. After finishing their meal, they left the restaurant, and resumed their trip. The elderly woman left her glasses on the table. She didn't miss them until they had been driving about forty minutes.

By then, to add to the aggravation, they had to travel quite a distance before they could find a place to turn around in order to return to the restaurant to retrieve her glasses.

All the way back, the elderly husband became the classic grouchy old man. He fussed and complained, and scolded his wife relentlessly during the entire return drive. The more he chided her, the more agitated he became. He just wouldn't let up one minute.

To her relief, they finally arrived at the restaurant. As the woman got out of the car, and hurried inside to retrieve her glasses, the old geezer yelled to her, "While you're in there, you might as well get my hat and my credit card."

The pay increase
Maria, the maid, asked the lady of the house boss for a pay increase.

Her boss was annoyed at this and asked, "Tell me Maria. Why do you want a pay increase?"

'Well, Señora, There are three reasons why I want an increase... The first is I iron better than you.'

Wife: 'Who said you iron better than me?'

Maria: 'Your husband said so.'

Wife: 'Oh.'

Maria: 'The second reason is that I am a better cook than you.'

Wife: 'Nonsense, who said you were a better cook than me?'

Maria: 'Your husband did.'

Wife: 'Oh.'

Maria: 'My third reason is that I am a better lover than you..'

Wife (really furious now): 'Did my husband say that as well?'

Maria: 'No Señora, the gardener did.'

Wife: 'How much do you want?"

This column is about my personal search for the perfect investment. I don't give investment advice. For that you have to be registered with regulatory authorities, which I am not. I am a reporter and an investor. I make my daily column -- Monday through Friday -- freely available for three reasons: Writing is good for sorting things out in my brain. Second, the column is research for a book I'm writing called "In Search of the Perfect Investment." Third, I encourage my readers to send me their ideas, concerns and experiences. That way we can all learn together. My email address is . You can't click on my email address. You have to re-type it . This protects me from software scanning the Internet for email addresses to spam. I have no role in choosing the Google ads on this site. Thus I cannot endorse, though some look interesting. If you click on a link, Google may send me money. Please note I'm not suggesting you do. That money, if there is any, may help pay Michael's business school tuition. Read more about Google AdSense, click here and here.