sundrenched

Thursday Outlook: Commodities, Global Markets

I agree that some of the commentary is too cryptic. For instance, "Curious how these blue lines work sometimes" (EWJ)... I have no idea what that means.


On Jun 04 12:03 AM User 425362 wrote:

>
> the problem is fry your commentary is pretty vague and not actionable.
> You describe what has happened, but not what will. it' Kinda like
> a chimp that throws shit at the wall; all you have is a dirty wall.

Don't Jump into the Markets and Be an April Fool

I picked up some USB preferred stock upon reading your article early March and didn't regret it. I'll keep reading your stuff. Thanks.

Eight Signs Gold Is Headed for a Correction

Good article. If you're really worried about fiat money, then a safer way to play it is buying Buffett-type stocks (i.e., good companies that make products we'll still be consuming 20 years from now). At least that's a non-zero sum game, and you own a stake in a real business, as opposed to something whose value is based purely in crowd psychology.

Why Gold ETFs Trump Gold Bullion

Pick and choose your ratio... Looking at previous bear markets, you're right to say that the gold/Dow ratio has further to rise. But if you look at the ratio of gold to oil, then gold looks seriously overpriced.

To each his own, but personally I think it'll be easier to make money in oil than in gold at current price levels, with less risk of a vicious drawdown.


On Feb 25 03:06 PM clam75 wrote:

> I don't wholly trust the gold ETFs. Can one of their shareholders
> actually go to a depository and SEE the physical gold that is owned
> by the fund? If not, I'd be very suspicious. Until the Dow/gold
> ratio gets to 2:1, I think that buying physical gold is a good play.

Why Gold ETFs Trump Gold Bullion

You put it well: "survivalists" :) I'll take my chances that we're not going back to a medieval economy. Bullion is nice to look at, but the bid-ask spread compared to GLD is way too big. Today you pay a premium because they can't melt and distribute the stuff fast enough, and once the sell-off comes it will be the opposite.

Today there was an interesting article about silver in the Financial Times also. It's up 40% for the past 4 months, mainly driven by investment demand. Industrial demand has dropped and output has increased. Looks like a good shorting opportunity once the trend breaks.

Nine Ways to Profit in 2009

You're doing well so far. I agree with most of your themes, but would recommend different trading vehicles for those who want to buy and hold. It's becoming well-known now that these leveraged vehicles only work well for holding periods of a few weeks. Personally I'm playing some of the same themes by selling calls, buying puts, and through plain old shorting.

Please keep us updated -- a year is an eternity in this market!

Gold: The Only Remaining Bubble?

I put in a sell order on my GLD holdings while the going is good after reading your article. It had been on my mind for the past 2 weeks. Everyone and his dog is getting in this game now, not because they want to own it at this price, but because they want to flip it on to a Greater Fool. Gold may well rise a lot further, but I doubt many will get out in time once the momentum goes the other direction, as always happens when the only reason for buying is that everyone else is buying.

12 Reasons to Short Gold

sorry, accidentally posted too early.

My point is: I doubt anyone inherently values the stuff at $3000 -- the only reason they want to hold it at this price is that they hope someone else will come along who will buy it at an even higher price (in turn with the intention of passing it on like a hot potato).

Hmmm, is beginning to sound like another ponzi scheme like we've had several in the past couple of years.

12 Reasons to Short Gold

I have some money in GLD right now but recognize it's a Greater Fool game. People talk about gold reaching $3000 and it might, but the question is: how many will be able to CASH OUT

Wednesday Outlook: Commodities, Emerging Markets

Martin Wolf of the Financial Times has a very nice column today. He found exactly the right word to describe this situation: "depressing".

Just more of the same dithering, with the underlying cause money politics. Them lobbyists sure were worth every cent. As for Tim Geithner, I'm beginning to fear his ultimate goal is a multi-million dollar job after his stint in the treasury. I do hope I'm wrong, but what we're seeing so far doesn't make me optimistic. As for Obama, is this what he meant by "change you can believe in"? I'm gonna be sick.

Peter Schiff: Outlook for the Gold Market

I'm reading his "little book" (a good read), and what you say has to be refined a little. One of his specific recommendations is to buy equities in developed nations that export commodities (Norway, Netherlands, Australia, New Zealand, Canada). Emerging markets are more speculative (political risk, etc.) and he recommends only limited exposure (10% if I recall correctly). Economies in such countries will benefit from the recovery in commodity prices that he predicts, and their currencies should also do well due to their strong export performance (except perhaps in the case of the Netherlands, which uses the euro).

On Dec 29 05:09 PM Sleeves wrote:

> Quick question. If the Europeans are doing the same as the Fed why
> does P. Schiff their currencies will fare any better than the Dollar?
> Why invest in European Equity?

Peter Schiff: Outlook for the Gold Market

Noop, this is a common misconception, but this money never existed, it was only an estimate of worth, not actual worth. The market cap of a company is the number of outstanding shares multiplied by the last transacted price, but the last transacted price would not be available to all shareholders if they tried to sell all at the same time.

Likewise, all this housing wealth that disappeared never really existed to begin with. I bought a house at 250k and at some point similar houses in my street were going for 450k, and now it's back at 250k, but that doesn't mean that I lost 200k and someone else walked away with it. I suffered a theoretical loss, but no money changed hands.

On Dec 23 09:50 PM BrucePile wrote:

> To the point about all the money lost in the stock markets causing
> an equal amount of deflation: all that money did not disappear !
> The market is a zero sum game; every dollar you make in the market
> comes out of some other participant's pocket on the losing end of
> a trade.

A Trend-Follower Positions for 2009

SDS (ultrashort S&P500) is down 10% since its inception 2.5 years ago, where it should have increased by 50% based on the S&P's 25% drop over the same period. That's downright scary! Granted, very few people are going to hold these ultrashort ETFs for 2.5 years, but even over a few months you pretty bad drift. This is a real problem if you want to implement a macro approach and you may have to wait a while for things to play out. For instance, I expect commodities to recover strongly once the economy picks up, but I'd never use an ultralong ETF to wait for that to happen.

Friday Outlook: Commodities, Emerging Markets

I was in SKF mid July. Do note you can find yourself in the mother of all short-squeezes with these ultrashorts. At some point in the collapse I put in a market sell order and I just couldn't get it to go through. By the time it got executed the price dropped more than 20 dollars.