Saturday, May 30, 2009

A little bit raw - always honest

Late night on Friday having a night cap in beautiful metro Detroit - in the eye of the economic hurricane folks.

If you were short into the the 3 o'clock hour today you are probably still out drinking and talking about how much BS that 2% rally in the last 30 minutes was. I agree - but at the same time I am not surprised going into the end of the month. First, I think the current market is more like a casino (rigged - yes, maybe?) than I have ever seen. "Market Forces" seem to be at work and it sure as hell doesn't feel right to this trader. So much effort seems to be being put in to organize the positive spin on things and how many times have we seen a 3:30 or after rally get out of control with huge volume coming in from "somewhere" and the banks and reits going nuts. A lot.

Raise your hand if it actually makes you want to physically hurt someone when you hear them say the words "green shoots". It makes me want to gag. Someone comes up with some stupid term and then every "f"ing monkey on TV in the investment world starts spouting it as if the more times they say green shoots the faster they will get back the 50% they lost their clients by being 100% long the market all year last year. These are the same people who said buy and hold, you can't time the market, just buy great companies, etc. The sad thing is if that's all the advice you can give me as an advisor I think I can pay 15 basis points for that and just buy index funds - give me some real money making advice, genius! Oops, I just rambled anger for a little bit there - back to my investment thoughts.

So how have I traded it... Well I don't want to fight the "market forces" but I believe the rally is nonsense on a fundamental basis although maybe the fundamental basis is that the Fed is willing to kill the dollar and that would be good for the nominal price of stocks. Anyway, I have been and continue to be long gold (GLD), gold miners (GDX), silver (SLV), agriculture (DBA), Oil (USO) through calls I bought a few months back, somewhat short the S&P (SPY) and Nasdaq 100 (QQQQ) in smaller size, Short the long term treasuries (TLT)/(TBT), and newly long natural gas (UNG). I think the economy is going to get worse in the next 6 months and the reality will sink it for investors. I think inflation or stagflation is coming despite the deflationary concerns right now.

I think we will drop 10%+ from here (920 S&P) and possibly test the lows again although a run to 950 to 1000 will lead me to add to my shorts in the market. That said, if the the dollar gets destroyed that may keep the nominal price of stocks up, but my commodity plays should more than offset any damage to my short positions. This is a long post but I want to frame my HONEST holdings for the people who stop by this blog for the first time. A little bit raw - always honest.

1 comment:

  1. US may become a banana republic - i like the commodity plays. good luck with the blog.


None of my content is a recommendation to buy or sell any securities.

Please do your own research or consult an advisor before making any investments.