How Fake Exports Caused The Yuan Rally [View article]
Thanks a lot for your insightful piece. In regards to your 3rd point, would it help China if yuan becomes an international currency, so they can survive even if dollar follows out?
"Do you think the housing market couldn't absorb a few trillion new dollars?"
Yes if Fed starts buying houses and let us rent for free. Maybe I should hold off buying a house and wait for that.
The problem is, only Fed has money. All the rest of us, the consumers, are less fortune because of 1. high unemployment 2. inflation that eroding purchasing power 3. shrinking household asset value
I spent some time to think about it and still think 12 months are good.
For inflation protection, since I'm using 10 year and 30 year bond yield and if we trust them to reflect correctly the inflation expectation in 10 years and 30 years, it is already a very long horizon. If there is high correlation (even within the last 12 months) it means that (in the past 12 months) people think silver is a good inflation protection for the next 10 years and 30 years.
I use 12 months because some attributes are transitory. There is possibility that because marco environment changed in the past 12 month and suddenly silver becomes a choice for inflation protection. Because a high correlation in past 5 years usually lead to a high correlation in past 1 year, but not vice versa, using a longer period can be false negative. But using a shorter period will not be false positive.
I use 12-month correlation because things change over time, and I believe the most recent history matters the most. But your brought up a good point. Let's me think if I can figure out a way to estimate the right length for different things, such as "safe haven", etc. Thanks!
Not sure whether you are talking to me or someone else. According to the number I provided, silver is only moderately correlated to TNX and TYX. It provides some level of protection from inflation, but certainly not "a great" one.
Good question. If A and B are strong correlated, it means that roughly
A = k * B + c
Let's say A is stock market, B is silver, and you can have a multiplier k = 3. Thus Silver will advance 30% whenever stock market advance 10%, roughly speaking.
Of course, if k < 1, then Silver will under perform the stock market.
Besides, as shown in the numbers, silver has less correlation to U.S. stock market. It is more correlated to China stock market.
How Fake Exports Caused The Yuan Rally [View article]
The Fed's Dilemma [View article]
Yes if Fed starts buying houses and let us rent for free. Maybe I should hold off buying a house and wait for that.
The problem is, only Fed has money. All the rest of us, the consumers, are less fortune because of
1. high unemployment
2. inflation that eroding purchasing power
3. shrinking household asset value
Growth Off, Risk On [View article]
I would wait until next week to buy dip. I can only tell you now it's up to the Fed.
What Is In The Silver? [View article]
Thanks a lot. Fed skewed things up. But China's data are not trustworthy. Let me think about it.
Amazon's $1 Investment Generates Only 6ยข Return [View article]
I would agree.
First Solar A Long-Term Play [View article]
What Is In The Silver? [View article]
I spent some time to think about it and still think 12 months are good.
For inflation protection, since I'm using 10 year and 30 year bond yield and if we trust them to reflect correctly the inflation expectation in 10 years and 30 years, it is already a very long horizon. If there is high correlation (even within the last 12 months) it means that (in the past 12 months) people think silver is a good inflation protection for the next 10 years and 30 years.
I use 12 months because some attributes are transitory. There is possibility that because marco environment changed in the past 12 month and suddenly silver becomes a choice for inflation protection. Because a high correlation in past 5 years usually lead to a high correlation in past 1 year, but not vice versa, using a longer period can be false negative. But using a shorter period will not be false positive.
Using DuPont Analysis: Is Amazon Really That Great? [View article]
What Is In The Silver? [View article]
I use 12-month correlation because things change over time, and I believe the most recent history matters the most. But your brought up a good point. Let's me think if I can figure out a way to estimate the right length for different things, such as "safe haven", etc. Thanks!
What Is In The Silver? [View article]
Things change over time. That's why I only look 12 months back. It may change in the future. But it gives you a good point to start with.
And as I've repeated, it's not DOW or S&P, it's China stock market.
What Is In The Silver? [View article]
I used OLO as a proxy of crude oil and the correlation between OLO and SLV is only 0.31.
What Is In The Silver? [View article]
Not sure whether you are talking to me or someone else. According to the number I provided, silver is only moderately correlated to TNX and TYX. It provides some level of protection from inflation, but certainly not "a great" one.
What Is In The Silver? [View article]
Thanks a lot for your valuable inputs. My post was more quantitative and less qualitative, and your inputs make it complete.
What Is In The Silver? [View article]
Good question. If A and B are strong correlated, it means that roughly
A = k * B + c
Let's say A is stock market, B is silver, and you can have a multiplier k = 3. Thus Silver will advance 30% whenever stock market advance 10%, roughly speaking.
Of course, if k < 1, then Silver will under perform the stock market.
Besides, as shown in the numbers, silver has less correlation to U.S. stock market. It is more correlated to China stock market.
Time To Give First Solar Some Love? [View article]
Today it's down a lot and may go down further. It may turn out to be a good dip to buy. Thanks again!