It seems like yesterday that we were venturing in this space the theory that the stock trader drunk from the bull market was finally showing curious signs of sobriety, an unfortunate symptom of a bear market gone into extra innings.

Gosh, what could we have been thinking?

Surely, somebody spiked our coffee.

The thought occurs to us as the split screen on CNBC showcases two disturbing images of war – bombs raining down on Baghdad and panting, wild-eyed, war-drunk traders chasing an inebriated stock market.

Tipsier than lushes at a wine-tasting convention, stock traders have been on one heck of a bender.

As the war in Iraq intensifies on a Friday afternoon as it enters the ‘shock-and-awe’ stage, so does the trading on Wall Street with the Dow Jones index trading up in harmony with the bombs.

Nothing and no one, not even the old sage, U.S. Federal Reserve general Al Greenspan, has until now been able to get this market out of a three-year hangover.

Nothing, that is, but the war.

In one day, the Dow surges 235 points, or 2.8 per cent, in extending its rally to eight consecutive days and concluding its best week (up 7.5 per cent) in almost 20 years.

At the same time, gold and oil – the commodity prices and the stocks – tank in tandem as investors flee safe havens.

The numbers are a bit more sobering in Canada with the TSX rallying a modest 60 points or one per cent. The bullishness is attributed to betting that the war could be swift and decisive, relieving the market of one of its uncertainties.

No doubt, there was a measure of psychological relief buoying the market, but some investment gurus such as Wayne Deans, of Deans Knight Capital Management, were quick to suggest that those who make their bets based on a war may be taking their eyes off the ball and neglecting the fundamentals.

“Throw out the war,” advised Deans, refusing to be taken off his game by the distractions. “It’s not going to change anything long term.”

Deans, whose top picks are featured in this week’s Pro’s 3 Stars (Page 17), has had phenomenal success picking winners including LionOre Mining, a near triple, in the bear market by ignoring the major indices.

Still, on this day, investors place their bets on the large caps as if the war was having an amnesiac effect on them.

Have they forgotten the bubble, the scandals, the nightmares?

Have they forgotten Nortel, Enron, VisuaLABS, Jack Grubman, Martha Stewart, Bernie Ebbers et al?

Have they forgotten Warren Buffett’s recent warning that stocks are far from cheap?

Have they forgotten about what really ails the U.S. economy and threatens a double-dip recession – the alarming jobless numbers, eroding consumer confidence and the monstrous budget deficit?

Ian Cockerill, CEO of South African gold miner Gold Fields (GFI-NYSE), gave a fascinating perspective at a gold conference in Australia recently by stating the war was U.S. President George W. Bush’s “weapon of mass distraction,” quickly stressing he wasn’t suggesting it was intentionally so.

As the rally began its ascent even before the first bomb was dropped, Derek Webb, head of San Francisco-based Webb Capital Management, said it was the “craziest thing” he’d ever seen.

“It is literally such a freak show out there, I am afraid to invest,” said the hedge fund manager.

“I don’t want to be short because I’m going to get crushed. I don’t want to be long because I don’t want to drink the Kool-Aid.”

Indeed, it seems the Kool-Aid’s been spiked. Again. Damned market.

Put on the coffee pot.

We’ll take it black, thank you.

* STREET TALK: Legendary investor George Soros told CNBC that the price of oil was “the most important single factor” that will determine the direction of the U.S. economy.

“If the oil in Iraq is secured, then I think we will go back down to the lower end of the price range, maybe in the mid-$20s (US per barrel) and that would benefit the economy,” said the chairman of Soros Fund Management.

Even with oil prices dropping, Soros sounded anything but bullish on the economic climate.

“Let’s see how the current rally helps to strengthen the dollar,” said Soros, the world’s most famous currency trader. “If it doesn’t strengthen the dollar, then I’m afraid that you are in for a continuing decline.

“What is different now is that we now have a budget deficit and that will be, I think, a big burden on both the dollar and the economy. The moment the economy shows some signs of recovery, it will be aborted by a substantial jump in interest rates.”

* SAGE WORDS: “What contemptible scoundrel stole the cork from my lunch?”

– W.C. Fields



HOT ALBERTA STOCK: RAVENWOOD RESOURCES
RWR-TSXV $1.30
Up 15 cents (+13%) on 340,400 shares (for week ending March 21).
Canaccord Capital further fuelled speculation of a takeover or merger involving Ravenwood, a red-hot junior play that recently announced a 61-per-cent increase in reserves in the past year. “Going once, going twice, gone soon???” wrote Canaccord in a morning note. In January, Ravenwood retained Waterous & Co. as a financial adviser as it reviews strategic alternatives. The stock has more than doubled off its 52-week low of 60 cents.



COLD ALBERTA STOCK: CCR TECHNOLOGIES
CRL-TSX 10 cents
Down six cents (-37.5%) on 41,600 shares (for week ending March 21).
CCR is a Calgary company focused on chemical purification technologies, but investors must be wondering what the company can do to purify a share price that hit a five-year low and has tanked 94 per cent since peaking at $1.80 in 1999.