Certainly there are any number of factors/issues that should be of concern for equity investors, but are there, in fact, “5 Reasons to Head for the Sidelines,” and perhaps more importantly, even if there truly are, should you?

CNBC and many other outlets (and the “analysts,” pundits, and politicians they cite) have expressed what I think is ridiculous concern that the pathetic Occupy Wall Street movement will be significantly bearish for stocks, especially financials.  I fail to see how a completely unorganized group of whiners and complainers very few (if any) of whom posess the knowledge to comprehend the very things they purport to want to change will affect stocks.  I think David Merkel of Aleph Investments/Aleph Blog fairly perfectly captured my feelings on OWS:

“My view is that most lasting change comes from within, slowly, and with a lot of hard work.  Complaining takes little work…You want to change things?  Start a political party, and challenge races in the assemblies of states, and in the House and Senate. ..Or. set up a business that can use many people who are presently unemployed can work, maybe asking for a waiver from minimum-wage laws so that you won’t lose too much money in the process…My view is that positive beats negative.  Build society rather than complain.”

Here in New York, its quite apparent that the allure for many participants is that of community.  They don’t know jack squat besides that their lives aren’t as awesome as they believe they should be, whether its because they can’t get a high-paying job with their degree in “cultural studies,” they heard on The Daily Show that all banks and “banksters” are evil, or whatever.  As the “protest” gets into its third month without accomplishing A SINGLE DAMN THING (besides inconveniencing tens of thousands of residents and hurting businesses), I think Americans are starting to lose sympathy, as the movement is being shown for what it truly is.  The same bullshit “protests” that have taken place on every college campus in the America for the past several decades (if not longer).

Should investors worry about OWS?  Methinks not.

Should investors worry about Greece and the other Eurozone issues?  Yes, but getting out of the market is definitely not the correct response.  Is Greece fucked?  Absolutely.  Italy, Spain, and Portugal?  Probably a bit less-so.  And the Eurozone itself?  I’m not sure, but I don’t see contagion spreading to many individual stocks (indicies, another story), except ones with obvious exposure to those countries.  With volatility and distress though comes great opportunity, and remember, you don’t have to just buy stocks, you can go short (stock or buy puts)!  Do not be afraid to make a bearish bet, or buy puts for downside protection in a long-biased portfolio, especially if you’re in financial stocks.

And MF Global?  Unless you trade on the CME, there isn’t much to be worried about there, except for the potential that the collapse may have lit a fire under embarrassed regulators’ asses, motivating them to take a closer look at other firms.  What they find there may very well be concerning, but our financial regulatory regime doesn’t exactly have a great track record of follow-throughs, so while there may be problems at other firms, I wouldn’t bet on regulators figuring it out.  More likely, other firms saw the MF Global debacle and scrambled to make sure they get their houses a little more in order so they don’t become the next one to fall. Those comparing the MFG mess to Lehman are insane.  Its apples to orange groves!

Congressional bullshitting?  Don’t even get me started.  They’ll get it figured out, at the last minute, good enough only to get us to the next juncture.  Will this affect market volatility?  Probably, but if you’re positioned for the intermediate-to-long term and aren’t leveraged, I wouldn’t much worry.  If you want to be prudent, though, there are several ways to hedge.  If you want to be aggressive, there are several ways to make money off Congressional ineptitude and politicking.

I really dislike quoting Warren Buffett, but I think when he said something along the lines of “be greedy when others are fearful, and fearful when others are greedy.”  If investors (retail, institutional, whatever) start to panic, that’s probably a good sign that its getting to be time to start bullish.  Carefully.

I will conceed one point though from Gluskin economist/strategist David Rosenberg:

“For a market that is trading more on headlines and technicals than on fundamentals,” Rosenberg said in his morning note, “these events have to be monitored.”"

There’s little value in making normative statements on how markets SHOULD react, but there is much value and more importantly opportunity in understanding how markets will likely (over-react), so you can position yourself accordingly.

Lastly: Don’t panic. If you look back through history we have endured things far worse, and far more wide-reaching than the current “major” issues.  Panic selling is seldom, if ever a good idea.  Long patience and prudence, short the “wisdom” of crowds.