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The Hard Trade
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Yaron Sadan is president of Osher Capital Advisors, LLC, a New York-based investment manager focused on value investing strategies across asset classes. Yaron is also the author of The Hard Trade (www.thehardtrade.com), a newsletter focused on global capital markets, macroeconomics, value-based... More
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Osher Capital Advisors, LLC
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The Hard Trade
  • And over in this corner... 0 comments
    Sep 13, 2011 12:48 AM | about stocks: USO, OIL, GULF, BNO, EIS

    While the world looks at the euro dying a surprisingly slow death, I once again have to shift readers' focus. The euro crisis is now headline news and politicians and pundits alike will come up with all sorts of explanations and solutions, but they, like many investors will miss the fact that the next big issue is already on the horizon, as we've mentioned for months: geopolitical instability. The euro is financial instability. But geopolitical instability is on the horizon and the implications have the potential to make significant impacts on the US.

    Did you hear that the Israeli embassy was stormed in Egypt?

    Egypt's fragmenting revolution

    The attack on the Israeli embassy is a wake-up call for the 25 January protesters to focus on the ballot box, not the streets

    The only surprising thing about the breach of the Israeli embassy in Cairo at the weekend is that it never happened any time before in the past 30 years. In a city that abounds in isolated walled desert compounds, someone decided to put the most often marched-upon facility in Egypt in a quite ordinary apartment building in the heart of the city, whose defences basically consist of however much force the security services/army choose to deploy on the street that particular day.

    You probably didn't hear about it, because 9/11 memorials and the euro were the only stories reported on CNN.com. What about the fact that Turkey is sending warships to support "aid" ships going to Gaza, and has pulled back from its very close ties to Israel? Most investors aren't aware that the Middle East is heating up. The Arab Spring is quickly shaping up to be a disappointment for external observers and internal populations.

    Is it any wonder that oil is finding a bid even as the market struggles?

    No, the developments in the Middle East aren't the only reason oil is catching a bid (QEIII is also a factor as is the fact that China is still importing resources), but it's definitely A reason, and one that will become increasing important as supplies become threatened.

    So while currencies are still the markets that need the most watching, investors should already be looking at the second and third derivative plays for the months ahead.



    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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