Why Geopolitical Events Must Be Followed

Peter Lynch made the comment that politics and economics do not matter in stock picking. He was smoking crack when he made this statement and said only to be self serving. Tonight we have a classic example of why the geopolitical needs to be watched.

Russian billionaire Boris Berezovsky said he is planning a revolution in Russia to remove George Bush's pal Vladimir Putin from office. The quote is as follows:

"It isn't possible to change this regime through democratic means. There can be no change without force, pressure." Then he was asked if he was fomenting a revolution, he said:"You are absolutely correct."

The gauntlet has been thrown down and this could become a very disrupting event to the capital markets.

There are lots of "smart shorts" in this stock

There are lots of "smart shorts in this stock" is a phrase we hear over and over again. Nothing could be further from the truth....... Take the latest example, Dendreon (DNDN). On Friday, the stock jumped from a Thursday close of $5.22 to finish at $12.93. So if you were short the stock it went up $7.71 or 147% in one day. Hmm, that seems whoever was short was not very smart in fact I might call them the opposite of smart, just plain dumb.

Here is the argument why the short sellers are the smart ones. The shorts had done their work and came to the realization that Dendreon's new drug Provenge had issues in the trial and would never be approved. Well this thesis was blown apart on Thursday afternoon when the FDA advisory panel supported approval of the first cancer vaccine for metastatic cancer.

A final approval by the FDA remains in the offing and the question is will the "smart shorts" stay around for this catalyst event or have they given up? Only time will tell.