Analyste de Boston

Two Great Bounces: 1929 vs. Today

Should we care more about 1929 or 1907?

I find Chris Ciovacco's analysis more informative, if you must stare at a chart:
www.marketoracle.co.uk...

John Hussman: Risk Management and Convex Return Profiles

Hussman is BRILLIANT, but he jumped in waaay too early last Fall. Pity he didn't follow his own logic & calls (I thought I did!) with more certainty. My Portfolio ended up +15% for 2008.

His Growth Fund (HSGFX) got badly burned, and he turned conservative at the most inopportune time! For 12 Months, his fund is DOWN -16%, while the S&P500 (SPY) is UP +8%. (My Model is UP +71%, and clients are gladly cycling some gains into PM bullion.)

Now Hussman is hedging his bets on the 'purported' rally... or answering performance concerns of investors? Hard to tell, but catch-up is wicked painful!

Emerging Markets ETFs Still Have Room to Grow

The biggest shocker in last September's decline, for asset allocators, should be how well EM equities performed. Usually "the most risky" asset class, they didn't do much worse than the broad US market indices overall.

The next big swan dive will probably show EM to be a marginally better investment on risk metrics than US equities, even better if there's a Dollar crisis included.

It's not decoupling but entails a radical reorientation of our VAR.

2 New Ways to Hedge Inflation with ETFs

I like Tom's articles but wonder if this is a (paid?) puff piece

GRES is the first global resources hedged ETF : how is it "hedged" exactly? It sounds like a F-o-F commodity producers index. Fine, but I don't even see that GRES includes commodities, which might theoretically hedge the equity portion.

This article raises more alot more questions than it answers, unfortunately.
Grade: F

Why a Gold Bug Isn't Buying Gold Now

I don't look to Gold for high Alpha, but rather low Beta.

I'm not a chartist, and as an asset allocator I've struggled to understand PMs for many years. I intuitively knew my colleagues were all wrong (dismissing Gold altogether), but I don't buy the wild optimism/dire pessimism of gold bugs either. I'm also opposed to thinking of Gold as a speculative investment; rather, it's just a hedge against a worsening financial & economic picture.

What percentage, PMs? I simplify this answer with the retort, "Whatever serious likelihood you'd ascribe to a Dollar Crash." (That's your MINIMUM, in bullion.) I also favor cycling 30% of Equity Market gains into PMs, after your paper portfolio gains +25%, +50%, etc. My rally Model is UP almost 60% since 3/9/09.

Asset allocation is a discipline, and I'm not so concerned with timing or today's prices (which will be irrelevant numbers after hyperinflation hits.) Gold is UP 50% since 3q07... while the money supply is UP +115% !. On that USD-relative basis, Gold would still be at discounted at $1,400./oz. So it's "cheap" now.

If the value of your paper currency will be debased & inflated in the near term, why not begin moving into hard assets with discipline? Temporary price fluctuations are a small inconvenience for the security of REAL value in bullion. As a wedge in the asset allocation, 10-20% sounds reasonable for an older, conservative investor.

I agree with the author in favor Palladium too: I suspect (fear?) we'll see that metal go parabolic within 12 months.

ETFs That Get Hit the Hardest When the Dollar Jumps

Did the nearly $2bln in Galleon funds just liquidated have ANY effect at all?

In Search of Healthy Currencies

There is no alternative to the Dollar NOW. Everyone knows this (or should) and until something is in the works that's the Devil-We- Know.

Don't presuppose there will BE no alternatives going forward, that's absurd. But it won't be any fun getting there, either...

Just as some pretend "no one" anticipated the catastrophic collapse, there's a peculiar anglocentric delusion the US Dollar is somehow immune to the Ultimate Crisis. Study history, folks!

The circumstances of dead fiats can be enlightening: the reasons are varied.
www.dollardaze.org/blo...

I'll offer a prognostication here: if we have another deflationary crash within 2-3 years, that probably won't kill the Dollar. But the NEXT one probably will.

Until then we trade, trade, trade ... and cycle profits into the barbarous relic!

ETF Securities Plans a Physical Palladium ETF

Palladium was still trading near it's 10 year lows when I screeched at clients to BUY, BUY, BUY the bullion back in April ($USD 230./oz) Prices being relative, Palladium was cheap then!

1) In 1982-83, the avg of USD$ 87./oz was the 25 year LOW: that's $134. in Jan 2009 inflation-adjusted (CPI) Dollars. In REAL inflation-adjusted Dollars, that's more like $154.

2) Palladium was trading as low as $164.-179. in December-January, that's our current floor. If the historic avg price was about $130. (1983-97) that's about $173. in Jan 2009 inflation-adjusted (CPI) Dollars. In REAL inflation-adjusted Dollars, the historic range of $130. more like $219. In 2009, Palladium was trading near $220. until mid-May.

3) For the last decade or so (1997-2009) the avg price was $335. Palladium is trading at that level right now, so it still looks reasonably priced relative to historic averages.

Betting on Natural Gas, Part II: Investing Ideas

There's no reason you can't drive a natgas-powered car TODAY, if you live in many metro USA areas.
gas2.org/2008/04/29/na.../
www.weststart.net/ccm/...
www.afdc.energy.gov/af.../

Nouriel Roubini, One on One: More Doom and Gloom

Roubini got the "big picture" right, years before the Crisis appeared on the front pages. His televised advice in 2008 was Treasuries & Cash, but his own 401k was invested in ... Equities! (During a Bear Mkt? Wow, epic fail.) He's like a doctor who correctly diagnoses a rare ailment that other specialists missed, yet goes on to prescribe the wrong medicine to the patient.

I pay attention to his macro read, but discount his investing advice altogether. It may also be true that his ego & status is now obstructing the coherence of his calls. Too bad.

PIMCO’s El-Erian: Focus on Absolute Levels of Economic and Market Data

"There's nothing here folks! Keep moving right along!" Really?

El-Erian managed HMC from February 2006 until July 2008. He was brought in by Summers, right? There's more to this story, developing...

Excerpt: tinyurl.com/ykpxwbv
The minutes of the Harvard board meeting where Summers heard newly hired endowment chief Mohamed El-Erian pitch the derivatives should make interesting reading for Harvard alumni, as the school expects them to come to the rescue for this investment debacle, the worst single loss in Harvard’s long history. {...}

One big question is why Harvard would even elect to go into this derivative transaction as the counterparty payer. The deal El-Erian
sold to Harvard was bereft of any 'escape hatches,' any stoploss
limitations if the LIBOR rate plunged. Another question is why
Harvard even had to get so much credit 'insurance' for building loans not yet made. At most, if Harvard did not want to self finance the construction, the school needed $250 million in derivatives.

The answer may lie with Pimco, if that company bought up Harvard
counterparty receiver derivatives from the financial firms that
originally held the Harvard paper. After Harvard fired Mohamed El-
Erian, Pimco hired him as their CEO. Whoever held these Harvard
derivatives as receiver made a billion dollar profit when Harvard paid to bail out of its foray into the derivative death zone."

This isn't to exonerate Summers - the culpability is debatable:
thisnewenglandblog.pro...

Robert Prechter's 'Conquer the Crash': A Forecast That's Still Coming True

I consider myself bearish (with leveraged shorts from 3Q 07 - 1Q 09) and I worked for a firm founded by another wave-theorist. I'm a skeptic, above all - what bothers me NOW is that so many who "got it wrong" are now pretending they "got it right" !

With a total disconnect from reality, scam-artists & charlatans appear from every quarter. I really don't get the whole "follower" thing, but the groupies' propensity to distort and mislead is even more alarming. Are they working on commission? What else could explain the intellectual dishonesty?

Robert Prechter's 'Conquer the Crash': A Forecast That's Still Coming True

I do not seek to mimic the crazies AND lose money. Losing money is bad (and easy) enough without following the biggest & baddest Wrong-Call Charleys. Here's how Prechter's trading advice did from 1/1/85 through 5/31/09 versus the broad U.S. stock market average (Wilshire 5000 index) according to Mark Hulbert's fact checking:

Total Return:
* Wilshire 5000 Index + 857 %
* Prechter's Trading Advice - 98 %

www.erictyson.com/arti...

PIMCO’s El-Erian: Focus on Absolute Levels of Economic and Market Data

I doubt that's true, and the blame lies somewhere between Larry Summers and El-Erian. I suspect it more Summer's fault.

The rest of the story's emerging at Bloomberg:
www.bloomberg.com/apps...


On Oct 14 04:25 PM Larry Doyle wrote:

> El-Erian was not at Harvard long enough to truly make a difference.

5 ETFs to Buy With Loonie's New Power

Although the FL mkt is still quite soft and may see some further decline (-15%?), RE can be an inflation-hedge for those with US investments. I've been bearish by temperament from 1999 on, but I believe stocks would go much much higher on a US Dollar devaluation.

US Treasuries is the bubble now popping, sloooowly.