SoYouThinkYouCanInvest?

It's All About Gold

I sold my gold holdings over the last few weeks and I am looking for a correction of 15-20% over the next 1-2 months. This will bring gold to 950-980 where I will again be a buyer. There could be a second correction after that, which could last through the spring and into the early summer at the latest. I don't see it as a big deal really, as we experienced similar corrections starting in May 2006 and March 2008.

For an explanation of my thoughts go here: soyouthinkyoucaninvest...

ETF Spotlight: iPath DJ AIG Copper Total Return Sub-Index ETN

For less "mainstream" commodities, such as copper, lead, coffee and sugar, the ETNs are pretty good investment vehicles. There are generally bid/ask spreads that are greater than say, GLD or USO, but unless you day trade they are smaller than many people think.

I compiled a complete list of all the commodity ETF and ETNs available to US investors as well as detailed data on each and saved them in a convenient google spreadsheet that everyone can view and download. Commodity types include precious metals, base metals, agriculture, energy and livestock. Note that I have only included those ETF and ETNs that track the commodity prices themselves, and not ETF and ETNs that track commodity based companies and also omitted leveraged ETFs because I do not recommend their use.

Check it out here: soyouthinkyoucaninvest...

3 Alternative Gold ETFs for Times of Global Uncertainty

I have personally had more luck trading gold itself instead of the miners but use whatever works for you. I will look to buy some junior miners sometime next year after this current correction underway is complete.

Besides GLD, there are other gold based ETFs and ETNs including IAU and DGL. JJP and DBP each hold ~80% gold and 20% silver. And then of course there is CEF, which gold, silver and some cash.

For a complete list of gold, silver and other commodity based ETFs and ETNs, check out my google spreadsheet here: soyouthinkyoucaninvest...

Finding Opportunities in Commodity ETFs

I compiled a list of all the commodity ETF and ETNs available to US investors as well as detailed data on each and saved them in a convenient google spreadsheet that everyone can view and download. Commodity types include precious metals, base metals, agriculture, energy and livestock. Note that I have only included those ETF and ETNs that track the commodity prices themselves, and not ETF and ETNs that track commodity based companies and also omitted leveraged ETFs because I do not recommend their use.

Check out the list here: soyouthinkyoucaninvest...

As the Dollar Rises and Gold Falls, Should We Get Ready for Fed Rate Hikes?

"Based on what central bankers have done and will continue to do - long gold, short dollar is the correct trade in my mind for the next many years."

I agree. I believe that gold kicked off a correction on Friday, however, that will last at least the next 1-2 months. This is similar to what happened in May 2006 and March 2008. I am looking for a re-entry point in the 950-980 range.

See my write up for an explanation: soyouthinkyoucaninvest...

As for the Fed raising rates, the Fed is pretty obvious in how they go about raising rates if you look at the past. What they look for is multiple positive monthly jobs numbers. So far we have not had one, so the earliest that we get two positive numbers is in February. The Fed will then adjust their comments and start putting out "feelers" in the media to let everyone know rates are coming. Then a month or two after that, the Fed will raise rates. This means we could see rates being raised as early as April.

Gold holders should not fear rising rates, however, as gold is likely to rise along with rates. This gives gold at least a few more years to run.

Bailout Nation: Merkel Reviews Ritholtz

Bailout Nation is, so far, the best single resource for understanding the financial crisis and subsequent bailouts. For a thorough review of the book please visit soyouthinkyoucaninvest...

Jim Rogers: U.S. About to Have a Currency Crisis

Jim Rogers loves to say that he is "the world's worst market timer" but as far as secular trends go he is always dead on. My commodity allocations in order are #1 agriculture #2 precious metals and #3 energy. Using the commodity ETFs and ETNs you can build a diversified portfolio with minimal effort. I wrote an article about some allocation ideas - check it out at soyouthinkyoucaninvest...

Why Are Oil and Gas ETFs Jumping?

It is important to have some upside exposure to oil but it is probably the least exciting commodity to invest in right now. Last summer it went parabolic and is unlikely to make new highs any time soon. Compare this to gold or some of the agriculture commodities who are more likely to make new secular highs this year. My commodity allocation in order is #1 agriculture #2 precious metals and #3 energy. I wrote an article about some diversification ideas using the commodity ETFs and ETNs - check it out at soyouthinkyoucaninvest...

Which Asset Classes Are the Best Inflation Hedges?

The problem with TBT is that it is leveraged and as such is meant to be trade and NOT to be held long term. Therefore it is not a valid choice for the role of an inflation hedge.

The very idea of TIPS is crazy if you think about it. The government, who is the source of inflation via increases in money supply, is going to sell me a hedge against inflation? Come again? TIPS are indexed to the CPI which does not include food and energy and is therefore a poor proxy of inflation. I'll pass.

Real estate is a poor bet because as inflation kicks in and rates rise, people can no longer afford the same monthly payments as before and thus housing prices will fall.

The best inflation hedge is commodities. Get some exposure to agriculture, precious metals and energy and you should be covered. I wrote an article about investing in commodities via ETFs and ETNs - check it out at soyouthinkyoucaninvest...

Considering the New Active Commodity ETFs

I am just not sure about using an actively managed commodity ETF. What is advantage of these funds over existing passive funds? You can create just about any type of commodity exposure without an active manager. I just put up an article about investing in commodities using the commodity ETFs and ETNs - check it out at soyouthinkyoucaninvest...

Watch Peter Schiff: It Pays to Be Contrarian

I have nothing against Schiff and I often agree with his investment opinions but I have a few problems with the way he argues at times. In his book he mentions how great his currency picks have performed (at the time) against the dollar in the prior 12 months. Since then, the dollar has trumped all of the currencies he mentioned. When pressed about it during media appearances he claims that (1) 12 months is too short of a time frame and (2) they are all fiat currencies so it doesn't matter. That is dishonest dialogue.

For my full review of Schiff's book please go to soyouthinkyoucaninvest...

Silver: The Other Precious Metal

SLV has rocketed up 60.24% from its bottom made late last year. 1 month returns are +21.87%. Last week it climbed 4.88%. SLV has also been riding the upper band of its bollinger band for over 3 weeks now. The last time it did that (March 08) SLV fell hard and fast. Take a look at my SLV chart and other commodity ETF charts at soyouthinkyoucaninvest....

Even the most ardent silver bull has to admit that a pullback at this point is likely.

More 12-Month ETNs, Please

I was bullish on BAL (Cotton) back in January. In the last month it has been my only pick to go down. There are other commodity ETFs/ETNs that look much stronger, including NIB (Cocoa), SGG (Sugar) and JO (Coffee). Even USO (Oil) and Natural Gas (UNG) are starting to look like they are forming bottoms.

Check out updated charts of these commodity ETFs/ETNs: soyouthinkyoucaninvest...

Trading the Crude Oil Contango with Two ETFs

Comparing the performances in USO verse USL is amazing:

1 year: -66.28% (USO) v. -50.14% (USL) or 16.14% difference
6 months: -72.10% v. -59.28% or 11.82% difference
3 months: -44.56% v. -25.62% or 18.94% difference!!!!!!!
1 month: -14.26% v. -8.84% or 5.42% difference

Meanwhile, the volume in USO has skyrocketed. Its volume has picked up from 10-15 mil to 30+ mil. Likewise, USL volume has gone berserk.
20k to 500k in the last few days! If long USL short USO has been the play then the unwind could be a nice play.

I'm finally bullish on oil (and natural gas - UNG) so this looks like a great trade to me. Check out some other commodity ETF trading ideas at soyouthinkyoucaninvest...

10-Year Treasury Yield Reaches Key Juncture

We are due for a bounce in treasuries. Look at the volume on TBT (double inverse long term treasuries ETF). It has absolutely skyrocketed and now is now traded more heavily than TLT! Friday's volume on TBT was 6,867,480 compared to TLT's 2,630,588. TBT was trading 100k shares a day just a few months ago. Couple this with Bernanke's intention to buy long term treasuries and shorts could get squeezed hard very soon.

See my full thoughts (with charts) at soyouthinkyoucaninvest...