Trader's Corner 2008

mkwin · Intermediate Crude Joined: Jun 01, 2007 Posts: 596

My oil option are for many years out ranging from 2010 to 2014. My spreadbetting is mainly short-term and based on getting exposure to break-outs from changes in the fundementals by new news or based on technicals. The only exception is I went long on gold when it was around $700 and have added to it a bit and kept it open. I am hoping for fundemental shocks at one or a series of these news points that will trigger a bear market in the equity market and allow me to ride the S&P and FTSE to the basement if a big recession comes.

Revi · Fusion Joined: Apr 25, 2005 Posts: 3252 Location: Maine

I picked other, because I like solar. FSLR certainly would have been a great stock to buy when it was $25 a share. 1000% is a nice return on your money. Scroll down to see it's rise:

http://finance.yahoo.com/q/bc?s=FSLR&t=1y

Renewables may be the ticket.

They certainly seem to enjoying some interest now. Even my ESLR stock has gone up over 150% since I bought it.

I think one of the best things to get in any scenario would be a bunch of solar panels. They won't wear out, and if you got say 10 200 watt panels you could be watching blue ray on the LCD in your bunker as the world melts down. How could you invent a better investment than that?
_________________
Deep in the mud and slime of things, even there, something sings.

cube · Fusion Joined: Mar 12, 2005 Posts: 3578

dinopello · Posted: Fri Jan 04, 2008 12:50 am Post subject: Re: Trader's Corner 2008

I'm going with other - meaning certain banks. If you figure in the dividend yield 6%+ and some have been beat down maybe close to what they deserve (some still not enough). Some articles are talking about takeover of some regionals by Canadian banks. So, it's a gamble but what isn't.

dinopello · Posted: Fri Jan 04, 2008 1:07 am Post subject: Re: Trader's Corner 2008

I'm suprised nobody picked metals yet. Does that cover metals like tellurium, palladium, halfnium? How much tellurium will FSLR need to fulfill the backorders ? Commodities can be tricky though.

patience · Expert Joined: Jan 04, 2008 Posts: 1521

I chose ag commodities, only as a maybe more stable class, since everybody needs to eat and climate change is throwing a wrench into production. I'm wary of precious metals since I see them as a commodity that is heavily manipulated. Cash is my second choice, and I've got skin in the game on both, although not in stocks, options, or such, but rather in dollar bills (the rest of the world probably being more screwed than the US) and a personal business that is somewhat ag-dependent.
Never been a trader, as such, but have done ok in real estate in the past. NOT a place to be now. I see 2008 as very volatile in all areas, which makes the case for cash, unless/until the govt decides to save us. We are seeing MONETARY deflation now, I believe, or stagflation leading to it. The FED is essentially powerless to help the solvency problem in banking, and the govt is stuck with a LOT of debt that could preclude doing any more than band-aid relief to J6P, which ultimately is inflationary.
As the credit cycle contracts, we could see a fast, or a slow fall into deep recession, or worse. I expect the politicians to throw the whole works at the economy this year to stave off depression before election time. Don't think it will be enough, nor will the spin-doctors be able to convince jobless auto workers, nor evicted Californians that all is well. They will stop spending, and others will too, as they get the picture. So, retail doesn't look too good.
There doesn't appear to be anything on the horizon that could be reflated into another credit bubble, so I think this boat is gonna sink. It could take a long time to do that, though, which means timing the market could be deadly. Likewise, with metals, if the rest of the world tanks worse than US, the dollar will fall, but not as fast as other currencies. That said, I won't buy PM's, since they look like a commodity speculation from that viewpoint, and the timing could wipe you out.
Krugman says a 30% fall in housing over 6 years before a bottom. Glad mine is paid off, because he says that would put 40% of mortgages underwater, if I got it right. Only a realtor would say to buy at this time.
I'm holed up in the country with a low overhead repair shop, at home, that is debt free, and don't even want to buy govt bonds, since we could have more PRICE inflation on food, energy, and mfrd goods. Whence I will go from cash to needed commodities, only.
I've been an interested spectator on the economy for 40 years, and I think you ain't never seen a wreck like we're gonna have over the next couple-three years. JMHO.

threadbear · Expert Joined: Jan 22, 2005 Posts: 7502

Wow Patience, Welcome. I agree with most of what you wrote, with the exception of PMs, but people should, of course, be cautious. I don't understand the concept of holding much cash, particularly American at the present time. After looking long and hard at the govt, the fed, the mismanagement and corruption of the country, that is made manifest, in it's currency, I'd dump it like a hot rock. Some other currencies might be safer, but don't think any of them are that trustworthy.

I think this is my favorite system--in a perfect world, and using yams instead of pigs.

The Daily Telegraph:

They cannot be folded into a wallet or withdrawn from a cash machine but ancient forms of currency such as pig tusks, mats and sea shells are undergoing a renaissance in the South Pacific.

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/12/25/woz125.xml

patience · Expert Joined: Jan 04, 2008 Posts: 1521

Threadbear,
Well, call me extra conservative, but I'm 61 years old, and don't have a lot of money I can afford to lose. Thus, the cash vs PM thing. PM's could go to the moon, or not? I don't know enoughto play that game.

I'm trying to stay more than one jump ahead of the devil, here, as I expect a major dislocation, and I'm not a day trader. example. Last Jan., I heard some about subprime problems, and moved money from 2 Janus stock funds to their money market fund. Turned out I shoulda stayed pat, but I didn't lose anything but gains I MIGHT have made in stock. By July, 2007, I got worried about mutual funds and told them to send me the money. Should have been an overnight wire to our bank. EIGHT DAYS later, after a plethora of excuses (we don't have your bank info----but they had been doing atou withdraws from that acct for 13 years) we got the money. I don't trust the system. Period.

If I have the cash available, I can order steel for my business, or buy food, fuel, etc. Not that much surplus, anyway.

I've read that the Chinese have experienced inflation many times, and the poor people, when they see it coming, go buy pigs and chickens..... Can't eat gold.

I've "invested" in futures-MINE! Bought a 640 watt solar system, (built from parts), put some into terracing the back yard for gardens, a new white metal roof on the house, insulation(foil IR barrier + 12" fiberglass), a sunporch/greenhouse, new woodshed, chainsaw, parts to build a wood splitter, a stash of gasoline, coal, firewood, tools, machines, and shop supplies. The shop ate about $60k over the last 5 years. But it will provide an income, in cash, checks, chickens, or whatever. I'm adaptable.

For ref. Google Prudentbear, or Tickerfoum.org, and search for the inflation/deflation debates. I particularly like Mike Shedlock, of Minyanville with regard to outlook. I don't think anyone can say for sure how this is gonna play out. I'm just covering my tail as best I can figure out. At present it looks to me like a slow deflationary train wreck over a period of a year or two, thus the cash. Yeah, I'll forego some inflationary loss on cash, but there are ways to mitigate that, which are easier for me than trying to hedge with currencies that I don't know how to do anyway.

threadbear · Expert Joined: Jan 22, 2005 Posts: 7502

It's a poser, isn't it? I'm more of the opinion that cash is actually quite risky, and plan to cash out on Tuesday. I've done all of the other practical things, but really have to hedge with the most appropriate counterweight to the US dollar, as I'm in Canada but income is from the US. If the American dollar loses value, PLUS my American income retreats in a lousy business environment, I can weather it with gold. I don't have enough faith in the Canadian dollar holding up in a dire scenario, to keep it in loonies, either.

For some reason, gold has gotten the tarnish of being a "wild speculative" play, among those in the financial industry, when it used to be considered the currency of choice for the uber conservative.

I've been reading all the bear sites since 2000, but didn't become a gold bug until 2003.

Can't eat gold, but it's ideal for anyone who expects even a vestige of a market system to prevail, and also for those who wish not to purchase land or home, at this time, and don't have room for chickens.

I think the "can't eat gold" idea is naive.

patience · Expert Joined: Jan 04, 2008 Posts: 1521

Agreed, that "can't eat gold is naive"! It can be sold for whatever you want. Also, being naive in that whole area is my problem. Your position with the currency exchange makes it clear you have to deal with that. I just don't know enough to have confidence in some means of hedging the currency devaluation, without getting into what looks like great risk to me. I don't want to impose on others for an education in this area, but I'm trying to learn more.

I think i've read that gains on gold aren't taxed the same in Canada as they are in the U.S. , making it a more favorable deal for you. Is that right? That and the big run-up lately, made me skittish, remembering the rise and fall of gold around 1980. If I felt confident that metals were a stable value article, I'd have some fast. Also have grave concerns that our govt could make it illegal to own again. You're spot-on about theircorruption !

Revi · Fusion Joined: Apr 25, 2005 Posts: 3252 Location: Maine

The economy is slowing quickly, which worries me. Will it turn suddenly deflationary? If it does I guess cash is king. If it stays inflationary, PM's are the thing to have. Hard to tell what will happen.
_________________
Deep in the mud and slime of things, even there, something sings.

NTBKtrader · Intermediate Crude Joined: Oct 19, 2004 Posts: 596

luxury and other expensive items will deflate, items that people need will inflate

MrBill · Expert Joined: Sep 15, 2005 Posts: 5394 Location: Eurasia

I am back, but busier than heck! Happy New Year's everyone. Thanks for the many well thought-out posts while I was away. I see the Santa Claus rally has subsided. S&P 500 down 4.5% YTD already (-6.5% in euros). Glad I did not panic and buy into the year-end mania. Didn't get sucked into $100 crude either.

Actually, I spent the first two weeks of the year skiing in France and Italy and it was great! I did not even so much as look at a newspaper or watch the news. So feeling like I have a clear head to make rational decisions going forward.

I am not going to make any recommendations or suggestions, yet, until I have a chance to read everything I missed over the past two weeks. But from skimming the headlines my guess is a US recession and the policy response will end up being stagflationary. The UK and EU will follow, although not likely become recessionary. Asian growth will slowdown more markedly after the Beijing Olympics in the second half of the year.

In otherwords the first half of 2008 will look a lot like the last half of 2007 with further deterioration later in the year. I am hoping that a US recession and a slowing Canadian economy will spook some real-estate investors into dumping rental properties and the Loonie will retrace some more from its highs last year. Then I would move those stronger euros into the Alberta rental property market. Hopefully at new entry levels that would generate positive cash flow over the long-term.

I still believe in emerging markets, commodities, metals and energy, but the low hanging fruit has already been harvested over the last 6-years, so entry levels will be key as most if not all assets are very expensive by historical and/or relative standards. Buy low and sell high, not simply buy and hold! ; - )

Talk to you later when I have a more coherent view to share. Cheers.
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The organized state is a wonderful invention whereby everyone can live at someone else's expense.

threadbear · Expert Joined: Jan 22, 2005 Posts: 7502

Mr.Bill, It seems like you're a much loved commodity around here. We'll take 3, maybe 4 of you. Laughing

threadbear · Expert Joined: Jan 22, 2005 Posts: 7502

Mr/Dr. Bill's economic diagnosis is stagflation. Another term is "inflationary depression", but we won't split hairs on terminology. I did a quick google of stagflation and came up with an article on a site I trust, Market Oracle. Here's what the MO author says about it. Sounds very encouraging for gold, for the forseeable future.

Market Oracle--Christopher Laird

Therefore, the CB desire to avoid a deep recession, keep interest rates low prevents enough slowing and inflation becomes persistent. The only way to avoid this outcome is to raise interest rates enough to cause a rather deep recession. Volker did this to stop the out of control inflation/stagflation in the US in the 80s and raised interest rates drastically.

Of course, there is now so much debt accumulated in the West in all sectors that permitting the deep recession needed to purge inflation becomes politically intolerable, as mass defaults on debts and bankruptcies and so on are inevitable. If CBs don't allow a serious recession, we get stagflation.
The US Fed and the ECB may be faced with the choice of raising interest rates and biting the serious recession bullet, or face ongoing and painful stagflation.

http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=3330