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Supreme Alpha
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I am an independent trader/investor. I like to look for opportunities to long and short equities with specific focus on companies that have gone public within the last four years.
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  • Cash in your Gold and short Treasuries 0 comments
    Aug 25, 2011 1:57 PM | about stocks: GLD, TBT, TLT, KBE, XLF

    Gold has had a great run since the beginning of July.  GLD went from 145 to as high as 184.82.  Is it time to get out?  Depite all the issues with Europe, slower growth in China, a slow recovery in the U.S., I still feel gold has gotten way ahead of itself.  It's been parabolic in its accent.  Recently I overhead a number of conversations from people who never follow the market and they provided further support for my argument that you need to get out of gold or at least trim your positions.  It goes something like this...  "Gold has been going up and up.  It's going to keep on going up and up because it's something you can touch and feel."  When I hear this from many people combined with all these infomercials on making money from gold, it's a sign to get off this train.

    It's time to sell your gold and invest your money in something else.  A good place would be the TBT (ultra short 20 year treasuries).  Fear has driven treasury yields to insane levels.  Unless a depression is around the corner, these yields just can stay at these low levels.  Despite Bernanke's assurances to keep rates low until 2013, it doesn't mean he can't raise rates before that.  I think he just did that to give a bit of certainty to the market.  The moment he feels inflation is rising or the economy is picking up steam, he can always nudge the rates upwards. 

    Disclosure: I am long TBT.

    Stocks: GLD, TBT, TLT, KBE, XLF
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