Seeking Alpha

Chris DeMuth Jr.'s  Instablog

Chris DeMuth Jr.
Send Message
"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
My blog:
Rangeley Capital on Harvest
My book:
Rangeley Capital Best Investment Ideas
  • Thank You, U.S. Taxpayers, For Insuring My Forex Account 13 comments
    Jan 5, 2013 9:03 PM | about stocks: YINN

    As previously discussed, a majority of our short ideas over the past few years have been in China. Additionally, we have shorted equities and derivatives related to Direxion Daily China Bull 3X Shares (NYSEARCA:YINN). That being said, I also like owning a bit of their currency. Although inconvenient and not particularly scalable, it is possible. I opened up a savings account and bought CDs from Bank of China's New York City branch at 410 Madison Avenue. They are an FDIC member, so I have US federal insurance on my savings. Given the nearly total lack of opportunity cost in terms of yield on my cash accounts, I decided to at least expose myself to the potential appreciation of a currency that is currently fixed at an artificially low cost. So far so good. Meanwhile, we are in the process of switching our mortgage over to Yen. To be continued.

    Meanwhile, if you would like to read more on China, I would highly recommend Mr. China.

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

    Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital, a partnership that invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our partners, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.

    Themes: China, Yuan, Yen, FDIC, renminbi, RMB Stocks: YINN
Back To Chris DeMuth Jr.'s Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (13)
Track new comments
  • Sal Marvasti
    , contributor
    Comments (1364) | Send Message
     
    Mortgage to yen, that was funny, but with all those bonds in Chinese hands it makes sense.
    6 Jan 2013, 08:20 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4093) | Send Message
     
    Author’s reply » I think so, but we'll see. I also like puts on Yen. My favorite Yen investment is long gold calls in Yen quanto. My hope and expectation is that will increase in value over the next few years. This is my favorite investment with a generational time frame.

     

    Chris DeMuth, Jr.

     

    Rangeley Capital

     

    6 Jan 2013, 08:37 PM Reply Like
  • Retirefund
    , contributor
    Comments (754) | Send Message
     
    Smart! I can't help but agree with your reasoning.
    14 Mar 2013, 02:24 PM Reply Like
  • Joe Springer
    , contributor
    Comments (2214) | Send Message
     
    Chris does that mean that if your CD loses value in dollar terms the FDIC pays the difference??
    18 Mar 2013, 11:50 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4093) | Send Message
     
    Author’s reply » Alas no. Just FDIC insured against the bank itself.
    19 Mar 2013, 12:04 AM Reply Like
  • Joe Springer
    , contributor
    Comments (2214) | Send Message
     
    Gotcha! Thanks, and you happen to be bullish on the Yuan vs. the Dollar and/or are diversifying..
    19 Mar 2013, 12:22 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4093) | Send Message
     
    Author’s reply » Bullish on Yuan and diversifying. Hyper bearish on Yen, which I have borrowed.
    19 Mar 2013, 12:24 AM Reply Like
  • Joe Springer
    , contributor
    Comments (2214) | Send Message
     
    Yes I watched the link you posted to the Florida hedge fund conference RE: Yen. Do you do that in your hedge fund (short the yen) or personally? Also, if you don't mind the question, do you use leverage?
    19 Mar 2013, 12:31 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4093) | Send Message
     
    Author’s reply » Yes.

     

    Yes, a spectacular amount of leverage. One can short billions of Yen at a tiny cost each year.
    19 Mar 2013, 12:41 AM Reply Like
  • Mercy Jimenez
    , contributor
    Comments (1921) | Send Message
     
    Chris,
    I, too, am bullish on the Yuan and have used it to diversify my USD cash. I opened my BOC account a couple of years ago when you still had to go in person to the NYC branch to do so (that in itself was an educational experience.) Today the account can be opened by mail. The only minus for me has been their anemic online capabilities.

     

    Short term I expect more of the political manipulations of the Yuan we have seen in the past, but long term I am in the camp that sees China letting the Yuan float more freely in 5 years or so: http://bloom.bg/16Gqrhu
    Thanks for your post.
    mj
    19 Mar 2013, 07:02 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4093) | Send Message
     
    Author’s reply » I sort of enjoyed going; when you're inside that bank it somehow feels as if you are actually in China.
    19 Mar 2013, 07:37 AM Reply Like
  • Squeeky Wheel
    , contributor
    Comments (310) | Send Message
     
    Note that if your Yen mortgage is a net gain you owe tax on the currency gain. If you lose money on the currency of the mortgage you do *not* get a deduction. Heads Sam wins, Tails you lose. Probably still worth while, but just something to keep in mind.
    19 Mar 2013, 05:55 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (4093) | Send Message
     
    Author’s reply » That is a rotten aspect, isn't it? Oh well. I have a few tax projects in the works:

     

    http://seekingalpha.co...

     

    http://seekingalpha.co...
    19 Mar 2013, 07:39 AM Reply Like
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Most Commented
  1. GCVRZ Forum Archive (1,000 Comments)
  2. Event Driven Q&A Forum (235 Comments)
  3. GCVRZ Forum (196 Comments)
  4. GPT Forum (127 Comments)
  5. Shorts Forum (120 Comments)
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.