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Francesco Checcacci  

  • QE Is Dead. Long Live QE
    Fri, Jan. 23 FXE, IEV, UUP 11 Comments

    Summary

    • While the Federal Reserve is engaging in more restrictive (or at least ending easy) monetary policy, Draghi has fired the bazooka, while the Swiss decided they had enough.
    • The obvious beneficiary will be the USD, while there might be a positive effect also for euro area banks.
    • However, in case of shock the dollar should keep benefiting while banks could tank.
    • Gold has started to behave as a currency again as a reaction of the ECB money printing, Swiss peg exit and overall uncertainty.
    • With this backdrop the wisest trades are probably going to be tactical positions on volatility and correlations at least until the smoke clears, and it might take a while.
  • The End Of Carry Reloaded: Gold - Hold Your Fire
    Nov. 13, 2014 GLD, UUP, FXE 4 Comments

    Summary

    • Revisiting previous posts, "The End Of The Great Carry" seems the dominant force right now, pushing the dollar up and EM equities and gold down from its highs.
    • The Bovespa has proved surprisingly resilient until relatively recently, while Asian benchmarks were weaker than US indices.
    • Even gold has behaved as expected, but rebounds at 1200 USD/Oz were short-lived, signaling weakness against the dollar strength which seems to dominate commodity plays now.
    • At the same time, geopolitical shocks have dominated the tactical landscape.
    • The new show in town is divergence between Fed and ECB monetary policy, but there are other forces potentially supporting the euro.
  • Gold: New Boundaries
    May. 14, 2014 GLD, IAU, PHYS 6 Comments

    Summary

    • Precious metals in general, and gold in particular, are peculiar commodities.
    • During periods with no economic stress, precious metals tend to behave like other commodities. In times of economic crises, however, with Central Banks printing money, historically gold behaves as currency.
    • At the moment, lacking new financial or geopolitical shocks, the price of gold should remain between 1200 and 1350 USD/Oz.
  • History Might Have Started Again-Fasten Your Seatbelts And Watch Your Portfolios
    Mar. 10, 2014 GLD, SPY, IWM Comment!

    Summary

    • Geopolitics are back, and investors might want to be wary of implications for global trade and their portfolios. Opportunities are bound to become more selective implying more thorough analysis.
    • In emerging markets, look for countries which have rule of law, sound trade positions and independent Central Banks. Chile and the Czech Republic should do fine.
    • Concentrate on cash flows and income statements: the time of the Balance Sheet focus maybe over for a while; small cap indices (like the Russel 2000) will probably outperform.
    • Be claustrophobic; whenever you take a position, always ask yourself how easily and quickly you can get out, either by liquidating or hedging, even in extreme environments.
    • Protect the downside: always have a part of your portfolio in something which will perform well when everything else is falling, like gold and quality government bonds.
  • The End Of The Great Carry: Winners And Losers In A Post-QE World
    Jun. 24, 2013 UUP, UDN, FXE 6 Comments
  • The Price Of Political Uncertainty In Italy: How Much It Costs And Why It Could Be A Bargain
    Mar. 11, 2013 EWI, FXE Comment!
  • Politics And Investments In Italy: Keep Calm And Carry On
    Feb. 28, 2013 BUND, BUNL, BUNT Comment!
  • Eurozone Peripherals: Opportunities For 2013
    Jan. 14, 2013 ITLY, ITLT, BUNL Comment!